Springtime seasonal in oil is being fed by a multitude of factors. Record gasoline demand, falling Venezuelan production, rising tensions between Iran, Saudi Arabia and the rest of the world is underpinning oil and oil product prices today. President Trump is meeting with Saudi Crown Prince Mohammed Bin Salman and the market is assuming that means that the U.S. and Saudi Arabia will take a tougher stance against Iran.

The rest of the world is also tiring of Iran, Saudi and the way they are waging the proxy war in Yemen showing little regard for civilian casualties in what the United Nations is calling “the worst man-made humanitarian crisis of our time”. The war has been with many atrocities and the players have broken down into multiple factions. 

President Trump will push the Saudi Crown Prince to try to find a way to end the conflict, yet at the same time work together to push back on Iran’s nuclear ambitions and crack down on their involvement in the war in Syria. Saudi Crown Prince Mohammed bin Salman said that Saudi Arabia would develop nuclear weapons if Iran did.

This comes as private forecaster reports that supply from the Cushing Oklahoma delivery point fell 326.000 barrels from Tuesday to Friday. That drop is reflective of strong demand. We also are seeing less of an impact from shale production on oil inventories that oil bears keep hoping for.

AAA reported that consumer gasoline demand is at the highest level on record for March. According to the Energy Information Administration’s (EIA) latest report, demand measured at 9.6 million b/d – levels typical of summer months, not the first quarter of a year. U.S. exports continue to trend high, accounting for a large chunk of this week’s demand data.

“As demand strengthened, gasoline inventories declined, pushing the national gas price average two cents more expensive on the week to $2.55,” said Jeanette Casselano, AAA spokesperson. “As a result, most motorists are seeing more expensive gas prices at the start of this work week.” Today’s national gas price average of $2.55 is two cents more than a month ago and more than a quarter (26 cents) higher than this time last year. Gas Buddy is also warning of an impending price spike at the pumps in the coming days. Make sure you go fill up soon.