Resilient demand puts gas prices within 10 cents of year-ago levels, AAA says

Aug. 14 (UPI) -- Resilient demand and a high price for commodities are pushing retail gasoline prices to new levels, with some regions seeing prices at the pump approaching year-ago levels, statistics from AAA showed Monday.

The travel club put the national average retail price at $3.85 for a gallon of regular unleaded gasoline, the highest level so far this year. Monday's national average was just a fraction higher than Friday, but 3 cents higher than this time last week and nearly 30 cents above the price at this point last month.

Some of the increase can be attributed to resilient demand. The Energy Information Administration, the Energy Department's data cruncher, said the total amount of refined petroleum products sent to the market during the seven-day period ending Aug. 4 was 2.9% higher than during the same period last year.

Analysts use that metric as a proxy for implied demand for refined products. Levels for just gasoline were up 1.4% from year-ago levels through Aug. 4, and refiners are struggling to keep up.

"The refining industry has been running at above 90% of capacity for more than a year on strong gasoline and diesel demand," said Phil Flynn, a senior energy analyst at The PRICE Futures Group in Chicago.

Meanwhile, crude oil prices finished last week in the black, ending the seventh consecutive week of gains. Saudi production restraint and a warning from the U.S. military to vessels moving through the Straits of Hormuz to use caution to avoid conflict with Iran are supporting crude oil prices, though markets were lower at the start of trading on Monday.

Crude oil accounts for the bulk of what consumers see at the pump and, in some markets, the price at the pump is very close to year-ago levels. AAA put the average price in Michigan at $3.92 per gallon on Monday, just 3 cents below year-ago levels.

"If gas demand remains high, alongside increasing oil prices, drivers should brace for increases in pump prices," AAA spokesperson Adrienne Woodland told The Detroit Free Press.

That national average price on Monday was just 10 cents below year-ago levels.