RI Gas Prices Spike

RI Gas Prices Spike

Northeast pump prices are surging in response to escalating conflict in the Middle East and steady demand for gasoline as the summer driving season shifts into higher gear.

On Saturday, the Trump administration bombed Iran's nuclear program.

Iran on Sunday threatened to blockade the Gulf of Hormuz, which could further impact the world's oil trade.

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Since the first week of June, oil prices have risen more than $10 a barrel and are now hovering around between $74 and $78 a barrel — a price level last seen in January. The increase stems in large part from the fighting that broke out between Israel and Iran beginning on June 13 and intensified over the weekend with the United States launching a series of airstrikes on Iranian nuclear facilities.

The average gas price in Rhode Island is up 9 cents from last week, ($2.98), averaging $3.07 per gallon. Today’s price is 6 cents higher than a month ago ($3.01) and 32 cents lower than this day last year ($3.39). Rhode Island’s average gas price is 15 cents lower than the national average.

AAA Northeast’s June 23 survey of fuel prices found the current national average up 8 cents from last week ($3.14), averaging $3.22 per gallon. Today’s national average price is 3 cents higher than a month ago ($3.19) and 22 cents lower than this day last year ($3.44).

As oil and gas markets weigh the potential for continued conflict or for Iran to follow through on threats to block oil shipments in the region, oil and gas prices are facing additional upward pressure on tightening inventories and robust demand figures reported last week by the Energy Information Administration (EIA). Inventories of both oil and gasoline fell last week, according to the EIA, with oil stocks falling by a sizable 12 million barrels to 420.9 million barrels as refiners produced more gasoline and diesel and more oil was exported. In the Northeast, gasoline supplies shrank by 700,000 barrels to 58.7 million barrels, which is still above 56.1 million barrels in storage last year but below the 62-million-barrel five-year average.
 
The EIA last week reported demand for gasoline reached 9.29 million barrels a day — a figure in line with expectations for this time of year and an increase over the prior week’s 9.17 million barrel a day reading. After lackluster demand readings all through the spring, markets are reacting to the stronger numbers in recent weeks with optimism, sending wholesale gasoline prices higher.