For those Americans who are planning a summer driving trip, be aware gasoline prices are forecast to be higher.
AAA says the current nationwide average price at the pump is $2.38 for a regular gallon , which is up about 6 cents from a month ago and up 17 cents from a year ago.
“As gas prices continue to reach new heights and hit an all-time high for the year, the summer demand has not kicked in, meaning consumers can expect the price at the pump to continue to rise for coming weeks,” according to the group.
With Memorial Day seen as the unofficial start of summer, and with that, the unofficial start of summer driving season, energy market watchers say consumers should be on the lookout for prices to drift up based on expected demand patterns.
Any production outages, such as oil refineries going offline or potential disruptions in oil-producing countries, could cause gasoline prices to temporarily spike, they add.
Behind the rise. Forecasts for higher crude oil prices versus last year are partially responsible for the gasoline price outlook. The Energy Information Administration expects the retail price of regular-grade gasoline to average $2.46 per gallon during summer 2017, up from an average of $2.23 last summer.
“Gasoline prices are forecast to be higher this summer compared with last year primarily because of Brent crude oil prices, which are expected to average $8 per barrel higher than during last summer,” the agency said in its recent summer fuels outlook report. The agency is the statistical arm of the U.S. Department of Energy.
The higher crude oil price forecast comes on the back of OPEC nations cutting production to alleviate a global supply glut. Both Saudi Arabia and key non-OPEC producer Russia have complied with announced production cuts, according to media reports.