August gasoline prices fell by 0.7% and settled at $1.36 per gallon on July 20, 2016. Prices fell to a four-month low due to the rise in gasoline inventories. We’ll look at gasoline inventories in Part 8 of this series.
Gasoline prices moved in the opposite direction from US crude oil prices on July 20, 2016. For more information on crude oil prices, read Part 1 of this series.
Gasoline prices: Peaks and lows in 2016
On February 8, 2016, gasoline prices hit a low of $1.14 per gallon—the lowest in 12 years. On May 24, 2016, gasoline prices hit $1.67 per gallon—the highest since August 2015.
Prices are up 20% from the lows in February 2016 due to the increase in gasoline demand. To learn more, read Bullish Crude Traders Closely Watch Gasoline Demand.
US retail gasoline prices
The EIA (U.S. Energy Information Administration) reported that the average US retail gasoline price fell for the fourth straight week. Retail gasoline prices fell by 1.0% week-over-week and closed at $2.23 per gallon for the week ending July 18, 2016.
Average US retail gasoline prices hit a 2016 high of $2.40 per gallon during the week ending June 13. For the week ending July 18, 2016, retail gasoline prices are 20.3% less than they were in the same period in 2015. Prices are trading lower due to strong gasoline production in 2014 and 2015.
EIA’s gasoline price forecast for 2016
The EIA forecasts that US retail gasoline prices, including taxes, will average $2.12 per gallon in 2016 and $2.28 per gallon in 2017. The rise in gasoline and crude oil prices benefits US refiners and oil producers such as Bonanza Creek Energy (BCEI), Western Refining (WNR), Warren Resources (WRES), and QEP Resources (QEP).