The Week

After several weeks of holding relatively steady, prices at the pump have begun to feel the effects of seasonal factors, primarily scheduled refinery maintenance.  The national average price at the pump rose to $3.34 per gallon Friday, seven cents higher than a week ago, three cents more than one month ago, yet 29 cents below the same date last year.  This week, for the first time in more than a month, the national average reflected a week-over-week increase.  While pump prices have ticked higher each of the last seven days, the year-over-year discount is just shy of a 30-cent margin, which was the largest gap since October 24.

Crude oil prices have been relatively stable to begin the year; however, prices moved higher to begin this week, settling above the $100 per barrel threshold Monday.  This marks the first time since October 18 that WTI crude oil has settled above the $100 threshold.  Contributing to the upswing are supply disruptions in Libya.  However, by week’s end the commodity slipped as lackluster U.S. economic data – an unexpected drop in U.S. retail sales in January combined with a spike in unemployment claims – raised doubts about U.S. economic growth, undermining expectations for higher global oil demand growth this year.  Crude oil settled at $100.29 on Friday.

 

In its weekly report, the Energy Information Administration noted that U.S. crude oil stocks rose 3.3 million barrels to 361.4 million barrels.  Gasoline stocks declined 1.9 million barrels to 233.1 million barrels.  Gasoline demand has yet to get up off the floor as January cocooning and February storms are keeping cars in driveways.  For the week ending Feb. 7, the EIA measured gasoline demand at 8.325 million barrels per day (bpd) after dropping 128,000 bpd versus the previous week.  Through the first five weeks of the year, EIA measured gasoline demand at 8.288 million bpd, which is 1.1% weaker than the same time last year.

The Weekend

“Crude oil prices had been relatively stable to begin the year; however, this week marks the first time since Oct. 18 that crude has settled above the $100 threshold,” said Tracy Noble, spokesperson for AAA Mid-Atlantic.  “So far this year, snow and cold temperatures across much of the country have led to weak demand as motorists stay off the roads and limit travel, but this is the time of year we tend to see prices start to climb.  Unfortunately for motorists, in the coming weeks, prices are expected to rise due to seasonal factors.”

 

The Week Ahead

In each of the past three years, the seasonal increase in gas prices, triggered by increasing demand, seasonal maintenance and the approaching switchover to summer-blend gasoline, was exacerbated by unexpected supply concerns or production issues.  AAA does expect gas prices to rise this spring due to seasonal factors. However, without the impact of geopolitical issues overseas or significant regional refinery issues here at home, AAA expects the national average to rise to $3.55-3.75 before heading lower into the summer.  There is always the potential that this increase could be more dramatic if unexpected issues rear their heads; however, the peak price during the first half of 2014 is likely to be lower than 2011 ($3.98), 2012 ($3.94) and 2103 ($3.79).

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

02/14/2014

Week Ago

Year Ago

National

$3.34

$3.27

$3.63

New Jersey

$3.27

$3.23

$3.57

Trenton

$3.32

$3.31

$3.58

Cape May County

$3.25

$3.19

$3.54

Burlington County

$3.26

$3.19

$3.53

Middlesex, Somerset, Hunterdon

$3.27

$3.22

$3.57

Monmouth, Ocean Counties

$3.27

$3.22

$3.56

Crude Oil

$100.29 per barrel

$99.88 per barrel

$97.31 per barrel