VIRGINIA BEACH, VA (May 14, 2018) –Motorists in Virginia and across the U.S. are expected to feel the sting at the pump as gas prices continue to rise in the wake of the White House announcement to withdraw from Iranian nuclear deal. Today’s price for unleaded gas in Hampton Roads is $2.70, 8 cents more than last week, 18 cents more than last month and 59 cents higher than last year. In Virginia, the current average is $2.67, slightly lower than the seven cities but still five cent more than last week.
At $2.87, the national gas price average jumped six cents on the week in part due to the White House’s decision to re-impose sanctions on Iran. As a result, 36 states are seeing gas prices that are a nickel or more expensive than last Monday.
“The Administration’s move combined with the switchover to summer blend, growing global demand and shrinking supply continues to fuel pump prices as we approach the summer driving season,” said Georjeane Blumling, spokesperson for AAA Tidewater Virginia. “AAA predicts that the national average may reach $3/gallon this summer, especially if crude oil prices continue to increase.”
At the close of Friday’s formal trading session on the NYMEX, WTI dropped 66 cents to settle at $70.70. Oil prices climbed to new highs for 2018 last week, following President Trump’s decision to re-impose economic sanctions on Iran and withdraw the U.S. from the Iran Nuclear Deal. Set in 2015 under the Obama Administration, the U.S. – along with the European Union, five permanent members of the UN Security Council, and Germany – entered into the deal that lifted economic sanctions on Tehran in exchange for the country downsizing its nuclear program. Some of the pre-2015 sanctions targeted the Iranian energy sector and impeded Iran’s ability to sell oil. With those sanctions being re-imposed in the next 3-6 months, Iran’s crude exports are forecasted to decrease, contributing to already declining global crude supplies amid growing global demand. Increased fears of instability in the region may push oil prices even higher this week.
Crude prices may also increase if EIA’s weekly report shows another drop in domestic crude inventories. Last week, the report revealed that U.S. crude inventories fell by 2.2 million bbl. At 433.8 million bbl, inventories around the country are approximately 88.8 million bbl lower than were they were in May 2017. Domestic inventories have fallen steadily since OPEC and other large producers, including Russia, have reduced their combined output since the beginning of 2017. The agreement is set to expire at the end of this year, as U.S. production continues to climb. It shows no signs of slowing anytime soon, with Baker Hughes, Inc. reporting that the U.S. gained 10 oil rigs last week. The total, 844, is 132 more rigs than last year at this time.
As part of North America’s largest motoring and leisure travel organization, AAA Tidewater Virginia provides its more than 330,000 members with travel, insurance, financial and automotive-related services. Since its founding AAA Tidewater Virginia has been a leader and advocate for the safety and security of all travelers. For more information, visit AAA.com and follow us on Twitter at Twitter.com/AAATidewaterVA or Facebook at facebook.com/AAATidewaterVirginia.