Gasoline prices are expected to rise in the coming days as a record 70.9 million Americans are expected to hit the roads over the Fourth of July weekend.
The national average price of gasoline was $3.51 a gallon on Thursday, about $0.02 higher than a week ago and a few cents lower than last year, according to AAA data.
“I expect the national retail price of gasoline to increase by $0.05 to $0.10 per gallon over the next seven days,” said Andy Lipow, president of Lipow Oil Associates.
The analyst notes that crude prices have risen about $10 a barrel since June 4, partly due to rising tensions in the Middle East. Traders are also monitoring the path of Hurricane Beryl, which became the earliest Category 5 storm on record.
“The weather agencies are suggesting that this is going to be a very active hurricane season,” Jason Gabelman, president of TD Cowen, told Yahoo Finance on Tuesday. “If [hurricanes] If the oil were to hit the Gulf Coast, it could disrupt the center of U.S. refining capacity, which represents about 50% of total U.S. capacity.”
Although Hurricane Beryl does not currently pose a direct threat to U.S. crude oil production, it is still on track to hit refineries in Corpus Christi, Texas. The region is home to about five refineries, which account for 4.8% of total U.S. refining capacity.
“Since Gulf Coast refineries are already operating at 90% to 95% of capacity, there is no slack in the system to compensate for the loss of production if a major hurricane shuts down a large number of refineries for an extended period of time,” Lipow said.
Rising seasonal demand has also contributed to crude oil prices hitting a two-month high.
On Thursday, Brent crude (BZ=F), the international benchmark, hovered just below $87 a barrel. West Texas Intermediate (CL=F) was slightly lower at $83 a barrel.
Lipow has called for Brent oil prices to hit $90 amid growing concerns about a broader cross-border conflict in the Middle East that could eventually include oil producer Iran.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X on @ines_ferre.
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