(WSET) — A light dip in gas prices over the past week both in Virginia and the rest of the country may only be temporary, according to a Gasbuddy analyst.
In the past week, Virginia gas prices dropped 2.8 cents while Americans on average paid 3.9 cents less per gallon.
The current national average of $3.5 is $1.35 cheaper than what drivers were paying a year ago in the record gas spike following the Ukraine war.
Now, production cuts from OPEC+ and Saudi Arabia may send prices up a bit from where they are now.
“While the national average drifted lower last week as oil prices cooled off, the drop may be temporary. OPEC+ agreed Sunday to additional production cuts, while Saudi Arabia is going above and beyond and cutting July production. As a result, oil prices are likely to see upward pressure as global supplies, which have remained tight, promise to become even tighter as a result,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “Last time OPEC+ agreed to cut production, it led to a temporarily rally in the price of oil, but as global oil demand hasn’t been as strong as expected, the cut failed to hold oil prices up. OPEC+ and Saudi Arabia are likely hoping that the rise in oil prices will stick longer this time, as the Saudi economy relies on oil prices north of $81 per barrel. It’s likely that as a result of the production cut, oil prices could rally this week, pushing gasoline prices higher as early as mid-week. How long any rise in gas prices lasts is up in the air, but I do not yet believe motorists need to be worried. Any rise in average prices should be fairly small, and we’re still extremely unlikely to make a run at record prices anytime soon.”