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AAA: Spike in Crude Oil Price Sends Pump Prices to New 2021 Highs

Motorists in the Carolinas are feeling the pressure at the pump this week as the ongoing effects from the pandemic continue to influence the crude oil market. Crude oil prices surged 5% last week with concerns that an already tight global fuel market could get even tighter this winter – and gas prices are being taken along for the ride.

Carolina gas prices spiked last week, making Sunday’s state averages for both states (North Carolina, $3.06 and South Carolina, $3.01) the highest daily average since October 2014.

“A major factor for the recent increase in gas prices is crude oil,” said Tiffany Wright, spokesperson, AAA – The Auto Club Group in the Carolinas. “It typically accounts for 50 to 60 percent of the price at the pump and last week’s decision by OPEC to not increase production only further exacerbated the upward movement for crude oil prices.”

Today, North Carolina’s gas price average currently sits at $3.06, seeing a 5-cent increase on the week. This average is 11 cents more than a month ago and $1.02 more than last year. South Carolina’s gas price average currently sits at $3.02, seeing an 11-cent increase on the week. This average is 12 cents more than a month ago and $1.08 more than last year. South Carolina is also part of the nation’s top 10 largest weekly increases.

The national gas price average rose 8 cents on the week to reach $3.27, also the highest price since October 2014. This average is 10 cents more than a month ago, $1.09 more than a year ago, and 63 cents more than pre-pandemic in 2019.

According to new EIA data, total domestic gasoline stocks increased by 3.3 million bbl last week and gasoline demand also increased slightly from 9.40 million b/d to 9.44 million b/d. The slight increase in gas demand aided in the national average’s rise. However, the main culprit for rising pump prices remains high crude prices above $74 per barrel.

For context, crude rarely exceeded $75 per barrel this year. However, on Friday, it briefly traded above $80, before settling at $79.31 – the highest daily settlement since October 2014.

Alongside the actions of OPEC+ last week, prices increased after the U.S. Department of Energy dispelled speculation that the Biden Administration would ban crude exports or sell crude oil held in the U.S. Strategic Petroleum Reserve. The sale could have put more crude into the domestic market, but it is unlikely to have had a sustained downward impact on oil prices. Prices have increased last week despite EIA’s latest report showing that total domestic crude inventories increased by 2.4 million bbl last week. For this week, crude prices could continue to climb if supply tightens.

For updated state and metro prices log on to https://gasprices.aaa.com
Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile