US drivers spending more to fill up in wake of oil's rally
US drivers are facing the highest pump prices in two months, a consequence of the costlier crude oil used to make the fuel.
Domestic retail gasoline averaged $2.19 a gallon on Wednesday, up about 5 cents so far this month, according to auto club AAA. Crude is the culprit. Benchmark crude futures in the US are the most expensive in months, following a rally fueled in part by optimism around the impending circulation of Covid-19 vaccines.
And the price of oil may rise further, hurting US drivers. Banks, such as RBC, suggest a strengthening physical market and improving consumption in China, have also helped boost prices recently.
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The crude needed to produce gasoline “is climbing due to the vaccination availability and promise that distribution is building toward being more widely available in 2021," said Jeanette Casselano, a spokeswoman for AAA.
Front-month West Texas Intermediate crude futures are up about $6 a barrel since mid-November. Gasoline futures are trading at the highest since August.
Drivers are paying more to fill their tanks despite swelling gasoline supplies and the lowest seasonal demand for the fuel in decades. This combination typically leads to lower pump prices.