Gasoline Soars Past $5 Per Gallon with No Sign of Slowing

Gasoline Soars Past $5 Per Gallon with No Sign of Slowing
One of Rigzone's regular market watchers focuses on rising gasoline prices, production trends, clean hydrogen developments and more.

(The views and opinions expressed in this article are those of the attributed sources and do not necessarily reflect the position of Rigzone or the author.)

In this week’s edition of oil and gas industry hits and misses, one of Rigzone’s regular market watchers focuses on rising gasoline prices, production trends, clean hydrogen developments and more. Read on for more detail.

Rigzone: What were some market expectations that actually occurred during the past week – and which expectations did not?

Phil Kangas, Advisory Leader for Natural Resources & Mining, Grant Thornton LLP: National gasoline prices have soared past the $5 per gallon milestone with no sign of slowing down, frustrating consumers and policy makers alike. It is no surprise that rising prices have spurred additional production. Baker Hughes reported that North America added 30 new rigs for the week ending June 10, more than doubling the sizeable jump of 14 new rigs the previous week. Nor is it a surprise that the production (as well as refining capacity) is falling short in providing the supply level needed to meet demand. The Energy Information Administration (EIA) released a report this week showing at least one abating factor on the supply/demand imbalance: that gasoline demand is down 5.6 percent over the same period from 2019, signaling rising prices are having an impact on consumer behaviors.

Rigzone: What were some market surprises?

Kangas: The Biden Administration took further action reinforcing its embrace of clean hydrogen as a priority alternative to fossil fuels. The Advanced Clean Energy Storage project in Utah was awarded a half billion-dollar federal loan, marking one of the first loan guarantees for a new clean energy technology project from the U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) since 2014. According to the department, the loan guarantee will “help finance construction of the largest clean hydrogen storage facility in the world, capable of providing long-term low-cost, seasonal energy storage, furthering grid stability”.  According to the DOE, the LPO has attracted “more than 70 active applications for projects in 24 states totaling nearly $79 billion in requested loans and loan guarantees as of the end of May”. The award announcement was made in the same week that the DOE launched the $8 billion H2Hubs Program. This program is designed to further accelerate the use of hydrogen as a clean energy carrier. The program is supported with funding for up to 6-10 additional hubs from the Bipartisan Infrastructure Law.

To contact the author, email andreas.exarheas@rigzone.com


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