National average retail gasoline prices hit $3.303 per gallon on Thursday, the highest since Dec. 19, according to auto club AAA. This week marks the first sustained uptick since early November, when prices hit seven-year highs and prompted the Biden administration to take a series of measures to lower prices, including a release of crude from the Strategic Petroleum Reserve.
Biden’s efforts to lower oil prices received an unexpected boost in November when the discovery of omicron roiled markets and sent crude plummeting on fears that the new Covid-19 variant would limit travel, crimping demand. With gasoline prices typically lagging oil, consumers got a much needed break from rising fuel costs heading into the holidays. However, oil has largely recovered as omicron appears to be more mild, keeping gasoline consumption high. West Texas Intermediate advanced 55% last year for the biggest annual gain in over a decade, with a 14% increase in December alone.
Implied gasoline demand on a four-week average basis held at a five-year high for the week ended Dec. 31 at 9.29 million barrels per day, according to the Energy Information Administration. That came despite a week-over-week dip, possibly a result of pre-holiday stockpiling by retailers and severe weather in parts of the country that curbed road travel.
Gasoline stockpiles have stayed at five-year lows and are set to tighten further on unplanned outages and a heavy maintenance season.