Gasoline prices are expected to rise in the coming days as a record 70.9 million Americans are expected to take to the streets over the Independence Day, July 4, weekend.
On Thursday, the national average price of gasoline was $3.51 per gallon, according to AAA data, about $0.02 more than a week ago and a few cents less than last year.
“I expect the national retail price of gasoline to increase $0.05 to $0.10 per gallon over the next seven days,” said Andy Lipow, president of Lipow Oil Associates.
The analyst points out that crude oil prices have risen by about $10 a barrel since June 4, partly due to escalating tensions in the Middle East. Traders are also watching the trajectory of Hurricane Beryl, which became the earliest Category 5 storm on record.
“The weather services are predicting this will be a very active hurricane season,” Jason Gabelman, managing director of TD Cowen, told Yahoo Finance on Tuesday. “If (hurricanes) hit the Gulf Coast, it could disrupt this center of U.S. refining capacity, which is about 50% of the U.S. total 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. There are about five refineries in the region, accounting for 4.8% of total U.S. refining capacity.
“With Gulf Coast refineries already operating at 90 to 95 percent of capacity, there are no reserves in the system to absorb production losses if a major hurricane shuts down a large number of refineries for an extended period of time,” Lipow said.
Rising seasonal demand also helped push crude oil prices to a two-month high.
On Thursday, the price of Brent oil (BZ=F), the international benchmark, was just under $87 per barrel. West Texas Intermediate (CL=F) was slightly lower at $83 per barrel.
Amid growing concerns about a major cross-border conflict in the Middle East, in which oil producer Iran could ultimately become directly involved, Lipow has called for a price of $90 for Brent.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X at @ines_ferre.
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