Going up! Gasoline prices continue to rise

DOVER — Typically, fall brings lower gasoline demand which usually pushes prices at the pumps down.

However, in the wake of attack on oil facilities in Saudi Arabia last weekend, gasoline prices at the pump in Delaware and across the nation are on the rise.

The average cost of a gallon of unleaded regular gasoline in Delaware on Friday was $2.493 per gallon. Nationally, the average was $2.669 per gallon, an increase of 10 cents since Monday.

Fuel analysts say motorists can expect some volatility at the pumps over the coming weeks.

Drone attacks on two major oil facilities in Saudi Arabia last weekend, including the world’s largest, Abqaiq, have taken 5.7 million (crude) barrels per day off the market, accounting for about 6 percent of the global supply.

“Americans can expect local pump prices to start to increase this week,” said AAA spokesperson Jeanette Casselano. “The jump could end up being as much as a quarter per gallon throughout this month. Whether this is a short- or long-term trend will be determined by the price of crude oil prices and how quickly the facilities in Saudi Arabia can recover and get back online.”

Damage to the facilities is still being accessed and there is no word if it will be days, weeks or even months before infrastructure is repaired. To ease concerns, President Donald Trump said he has authorized the release of crude from the Strategic Petroleum Reserve. Other Saudi-oil-consuming countries also have emergency reserves to help back-fill the global loss, if needed.

“Motorists across the country and here locally are seeing pump prices spike due to the loss of crude oil production in Saudi Arabia,” said Ragina C. Ali, spokesperson for AAA Mid-Atlantic. “The situation remains fluid, as how long the price spikes will last is unknown.

“However, AAA anticipates motorists may pay between five and 20 cents more than what they were immediately prior to the attacks in Saudi Arabia, depending on region and market.”

Notably, the U.S. currently depends less on crude imports from Saudi Arabia. The latest Energy Information Administration (EIA) report showed that the U.S. imported the least amount of crude oil from Saudi this decade. In the first half of this year, on average the U.S. imported about 18,000 bbl compared to 35,600 bbl in the first half of 2017.

Prior to the attacks, global crude oil supply was very healthy, in fact, sitting on a global glut of stocks.
The timing of the Saudi Attacks was actually a positive thing, according to Ken Grant, spokesman for AAA Mid-Atlantic.

“The Mid-Atlantic region is seeing less of a price hike than other parts of the country because of the weekend switch from summer to winter-blend gasoline, so while other parts of the country saw one day price increases of 20 cents or more per gallon, we have seen much more moderate increases at our pumps,” he said.

Global oil prices surged 15 percent immediately after last weekend’s missile attack on Saudi Arabian oil fields.
U.S. gas costs jumped 10 cents a gallon — the biggest spike since Hurricane Harvey shut down refineries in Louisiana and Texas in 2017.

Fuel experts estimate prices could climb up to 25 cents a gallon and the high costs could stick around through Thanksgiving.
Despite such dire predictions, President Trump was quick to try to ease fears that U.S. energy prices will continue to escalate.

The President took to social media site Twitter on Monday and wrote, “Because we have done so well with Energy over the last few years (thank you, Mr. President!), we are a net Energy Exporter, & now the Number One Energy Producer in the World. We don’t need Middle Eastern Oil & Gas, & in fact have very few tankers there, but will help our Allies!”

Delaware State News staff writer Mike Finney can be reached at mfinney@newszap.com.

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