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The average retail price of regular gasoline in the United States has risen by 6% over the past five weeks heading into the Labor Day weekend, the U.S. Energy Information Administration (EIA) said on Thursday.
On the Monday before the Labor Day weekend, August 28, 2023, the retail price of regular gasoline averaged $3.81 per gallon across the U.S.
Prices have increased by 6%, or by $0.22 per gallon, over the past five weeks, due to oil production cuts by Saudi Arabia, low U.S. gasoline inventories, and announced refinery maintenance in the U.S. Northeast.
After adjusting for inflation, retail gasoline prices going into this Labor Day weekend were 4% lower than the prices ahead of Labor Day 2022, per the EIA’s Gasoline and Diesel Fuel Update.
The cuts from Saudi Arabia and other major OPEC+ producers have raised international crude oil prices in recent weeks, which are the largest component of the gasoline price in the U.S.
Lower-than-usual inventories and refinery outages in the U.S. have also put upward pressure on gasoline prices in America this summer, the EIA noted.
Planned maintenance at two refineries, one in Canada, and one in Pennsylvania, from mid-September to mid-November are also expected to keep gasoline supplies limited, especially in the Northeast, the administration noted.
“Record temperatures in the South also caused unexpected refinery disruptions, contributing to a nearly 35-cent jump” so far this summer, fuel-savings app GasBuddy said on Tuesday.
“While gas prices have started to ease as the summer winds down, there still could be one last hurrah at the pump before things cool off this fall,” according to GasBuddy.
Patrick De Haan, head of petroleum analysis at GasBuddy, commented, “If we can escape further unexpected oil production cuts and outages due to hurricanes, we may avoid an unexpected surge in gas prices, with the downturn accelerating as we get into late September and stations transition back to cheaper gasoline.”
If all goes well, the U.S. could see a national average of $3.25/gal by the end of the year, De Haan added.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.