The approach of the summer driving season and the recent Canadian wildfires are driving fuel prices skyward.
The national average fuel price continues to increase over the past week, and prices are expected to continue trending upward as we enter into the summer driving season, with some expecting prices to reach a new high for 2016 in the coming days.
According to a report from AAA, the current average price of $2.22 per gallon is up 11 cents on the month. However, despite this price increase, drivers are still experiencing a year-over-year savings of 48 cents per gallon. Fuel prices are currently rising in response to the increased price for crude oil that was brought on by the recent wildfires in Canada, along with supply disruptions in other oil-producing countries.
Leading into the summer driving season, AAA reported that, despite the recent price increases, the demand for fuel has continued to rise. Demand recently reached its highest point for 2016 – 9.66 million barrels per day – which is also the highest number since August of 2015 and 4.4% higher than the same period last year. Reportedly, domestic gasoline inventories have been reduced by approximately one million barrels, but supplies remain around 14 million barrels higher than this date last year. Naturally, in response to the seasonal demand, refineries are increasing production nationwide, but some facilities have been impacted by the recent fires in Alberta, Canada.
AAA reported that, currently, drivers in California and Hawaii continue to pay the nation’s highest prices for fuel, with averages of $2.80 per gallon and $2.67 per gallon, respectively. Conversely, Arkansas and Texas are paying the lowest prices per gallon, with both states recording an average of $1.99.