May 8 (UPI) — The steady rise in consumer gasoline prices in the United States is tapering off, but a question mark remains over the Iranian deal, analysts said.
U.S. President Donald Trump is expected to announce Tuesday afternoon what the government will do with an agreement that lets Iranian oil flow in the market in exchange for commitments from Tehran to scale back its nuclear research program. A consistent critic of the deal, Trump pulling out could lead to spikes in crude oil prices and consumers could feel the impact at the pump.
Motor club AAA reports a national average retail price of $2.81 per gallon of regular unleaded, more or less unchanged from last week.
“If this past week’s moderate increases are any indicator of what’s to come, the fast rate at which gas prices were increasing may be slowing down,” AAA spokeswoman Jeanette Casselano said in a statement.
In a separate look, Patrick DeHaan, the lead petroleum analyst at GasBuddy, said the fate of the Iranian nuclear deal hangs over the moderation in consumer gas prices.
“Killing the deal may inflict more pain on motorists as it may lead to sanctions placed on Iran and their oil production, which would likely push oil prices higher,” he said.
Before Trump announced Monday that a decision was expected later today, most analysts said they expected the average price for gas to hover in the upper $2 per gallon range for most of the summer.
By region, the West Coast remains the most expensive market, with every state but Arizona recording an average price above the $3 per gallon market. California is tied with Hawaii for the most expensive gas in the country at $3.63 per gallon.
A look at regional gasoline inventories could support the moderating trend, with California prices moving only by about 2 cents per gallon from last week. Federal estimates show gasoline inventories are higher than they were this time last year.
The Great Lakes, meanwhile, is the most volatile market in the country, with Indiana posting a 6 cent per gallon increase and Ohio posting an 8 cent per gallon decline. The region may be recovering after a refinery incident in Wisconsin, but gasoline inventories are on par with the historic average.