US drivers paying most at the pump since the pandemic

Jeffrey Bair
Bloomberg

U.S. retail gasoline prices are at their highest since the pandemic drove widespread lockdowns last March, according to auto club AAA.

Thursday’s national price average of $2.29 a gallon is the highest in nearly 10 months. The boost in fuel prices comes after global crude futures reached the highest since February after Saudi Arabia cut output earlier this week.

The rise in pump prices reflects recent strength in crude, GasBuddy head of petroleum analysis Patrick DeHaan said. Oil has held over $50 a barrel this week.

“Optimism continues to build for a recovery in 2021,” DeHaan said in an email.

Still, gasoline demand is “lagging by 10-15% from a year ago, but with refiners trimming capacity and a weaker U.S. dollar, values have been climbing,” DeHaan said. On a seasonal basis, demand was at the lowest for this time of year since 1997, according to U.S. government data.

At the same time, Morgan Stanley expects the incoming Biden Administration to match Obama-era fuel efficiency standards that will cut gasoline demand by 5.6% over the next 30 years, according to a research report published Thursday.