WSJ’s May analyst survey puts crude at an average of $56 a barrel this year, down a dollar from April survey.
Just as gas prices began to rebound some during the Memorial Day holiday, long range forecasts indicate that gas prices might stall in the next few months.
AAA reported that the national average price of gas, on May 30, was $2.37 – one cent more than a week ago, two cents more than a month ago and five cents more than a year ago. Rising gasoline demand has resulted in dropping gasoline inventories across the country, according to the latest Energy Information Administration’s (EIA) report.
CUTTING THE GLUT
However, such an increase might not be sustainable over the long-term as oil analysts cut their price forecasts for the first time in eight months amid doubts that a deal by major producers to limit output will be enough to clear the global glut of crude according to a recent Washington Street Journal survey.
Members of the Organization of the Petroleum Exporting Countries (OPEC) May 25 renewed an agreement with 10 other crude-oil producers to limit output through March 2018. Crude prices tumbled by about 5% to trade below $49 barrel after the deal was announced.
There is still considerable nervousness over the rise of American oil producers, which have doubled the number of rigs in operation over the past year. U.S. producers aren’t part of the output agreement.