Gasoline pump prices in U.S. set to jump after Saudi attack
The attack on an oil facility in Saudi Arabia that sent futures prices soaring Monday will likely begin filtering through to gas stations later this week, according to price tracker GasBuddy.
The average U.S. retail gasoline had risen just one cent a gallon since Sunday, even as futures on the New York Mercantile Exchange jumped as much as 20 cents on the back of drone strikes on Saudi oil production.
The impact at the pump should start to become more pronounced late Tuesday or Wednesday, according to Patrick DeHaan, senior petroleum analyst at GasBuddy. That’s after gasoline distributors adjust prices to match gains in futures and regional spot markets.
He said an increase of 15-30 cents per gallon in average U.S. pump prices is likely during the repairs in Saudi Arabia.
U.S. crude at $70 a barrel would likely be followed by $3-a-gallon gasoline at the pump, said Jeanette Casselano, a spokeswoman for auto club AAA. October WTI futures were trading at $62-63 a barrel Monday.
Higher pump prices represent a political risk for President Donald Trump, who authorized the release of oil from the nation’s strategic reserve, to keep the market well-supplied.
A prolonged price increase could lead low and middle income voters to stay home from the polls come election time, said Kevin Book, managing director of ClearView Energy Partners in Washington.
“No voter has ever been happy about a price increase,” Book said in a phone interview. “They might not vote for the other party, but they might not get off the couch if they are pissed off.”
The rise comes during a time of year when prices typically fall during the transition to winter-grade gasoline that is cheaper to make. AAA earlier had predicted $2 gasoline in the U.S. South this fall; the cheapest states for gasoline, Mississippi and Louisiana, were around $2.20 per gallon Monday, AAA said.
“Right now you are seeing the stations rushing to get those tanks full. And those who are not able to fill up will be confronted with having to pay extra later,” DeHaan said.