Aug. 18 (UPI) — Retail gasoline prices in the U.S. economy may be at a pivotal moment as demand softens with the start of the school year, though storms brewing in the Atlantic could drive the market sharply higher, analysis finds.
Travel club AAA on Friday put the national average retail price at $3.87 for a gallon of regular unleaded gasoline, 3 cents per gallon higher than last week and 31 cents higher than this time last month.
Retail gasoline prices have largely followed trends in the crude oil market as the price of oil accounts for most of what consumers see at the pump. West Texas Intermediate, the U.S. benchmark for the price of oil, is on pace to end a seven-week streak of gains as China’s economy continues to perform worse than expected.
While its Western peers battle higher prices, Chinese prices are in retreat. Demand in the U.S. economy, meanwhile, could start to wane as students start returning to school as early as next week.
“While fewer drivers are fueling up at the moment, these looming weather concerns are a roadblock to falling pump prices,” said Andrew Grossman, a spokesperson for AAA.
Hurricane Hilary poses a threat already to California as it makes its way north in the Pacific. For the Atlantic, the National Hurricane Center shows four storms brewing that could evolve in severity. A patch of rain and thunderstorms off the coast of West Africa has a 60% chance of developing into a cyclone over the next 48 hours.
Should those storms reach U.S. territorial waters, it could drive the price at the pump sharply higher. A war premium stemming from the conflict in Ukraine was exacerbated last year when Hurricane Ian pummeled the west coast of Florida.
Florida has no refineries of its own, leaving the state highly vulnerable to even the slightest disruption. At $3.84, retail gasoline prices in Florida are already 45 cents higher than this time last month.
Nationally, meanwhile, the price at the pump is only 6 cents away from matching year-ago levels of $3.39 per gallon.
