(Reuters) - U.S. retail gasoline prices jumped on Tuesday after crude oil futures spiked nearly 15% following weekend attacks on Saudi Arabian oil facilities, though the increase may be less dramatic than originally anticipated after Saudi Arabia said it might restore its facilities within a few weeks.
The average national gasoline price jumped 3 cents to $2.59 per gallon on Tuesday, the American Automobile Association said on its website, with analysts anticipating a gain of roughly 10 to 25 cents per gallon in coming days.
Over the weekend, an attack on Saudi Arabian oil facilities – including the world’s largest, Abqaiq - knocked about 5.7 million barrels of crude oil output off the market, accounting for more than 5% of global supply.
Reuters reported on Tuesday that Saudi Arabia may be able to restore its production within two or three weeks.
“An hour ago I was assessing a national impact of 15-30 cents, but the news just now might push it back down to 10-20 cents,” said Patrick DeHaan, head of petroleum analysis at GasBuddy. “The end impact to consumers will be much more limited if this continues to play out.”
The United States consumes roughly 21 million barrels of fuels every day. Nearly 10 million of those barrels are in finished motor gasoline, by far the most widely used refined product in the nation, which is the second-largest vehicle market in the world behind China.
Gasoline prices are affected by a number of factors, including taxes and the need for certain additives, but the change in crude oil prices accounts for about half of the price for the fuel.
Prices near $3 per gallon nationwide are concerning, but are not likely to hurt economic activity in the way the $4-plus price in 2008 did for U.S. consumers as oil prices surged to more than $100 a barrel.
U.S. crude oil futures prices rose nearly 15% on Monday, while U.S. gasoline futures rose by 13%. On Tuesday, most different crude and fuel contracts were lower, as were gasoline futures, which fell nearly 5% to $1.666 per gallon.
Steve Neely, president of Noil Petroleum, a fuel supplier in Chicago, said he has noticed a hike in retail fuel prices. “We think the market is going to settle by Friday or Monday, though, and correct itself,” he said.
Economists at Bank of America-Merrill Lynch said in a note that the oil supply shocks do not have the same effect as they have had in the past on consumers. Before the 1970s, U.S. consumers spent about 8% of total consumption on gasoline, fuel and other energy goods. Now, that is about 2.3%.
More of the price pain at the pump could be felt on the West Coast, which accounts for nearly half of all of U.S. crude imports from the kingdom.
In California, average prices rose 2 cents to $3.65 per gallon on Tuesday, from $3.63 on Monday, AAA said.
Reporting by Laura Sanicola and David Gaffen; editing by Nick Zieminski and Marguerita Choy