The Week

Motorists have undoubtedly noticed gas prices beginning their seasonal uptick in recent weeks, jumping double-digits in many places since the beginning of February ($3.28 on Feb.1).  The national average price at the pump rose to $3.39 per gallon Friday, five cents higher than a week ago, 11 cents more than one month ago, yet 39 cents below the same date last year.  While the average price of gasoline has jumped more than a dime during this recent run (14 days through Friday), it is just seven cents above where it started the year ($3.32).  This is a departure from the last several years when surging prices to begin the year have frustrated motorists.  Last year, the national average increased 49 cents per gallon over 41 days, before peaking at $3.79 per gallon on February 27.  Pump prices historically trend higher in springtime due to seasonal factors including rising demand, refinery maintenance and the change-over to more expensive summer-blend gasoline. 

Crude oil prices, which were relatively stable to begin the year, have settled above the $100 per barrel threshold for nearly two weeks.  Despite lackluster U.S. economic data, made worse by rough winter weather, crude oil prices have been supported by increased global demand, increased demand for heating oil (a by-product of crude oil) and supply concerns in Libya and Venezuela.  Industry experts do not believe $100-plus per barrel crude oil prices will be sustained through the spring, barring any unforeseen circumstances.  Crude oil settled at $102.22 Friday.

In its weekly report, the Energy Information Administration (EIA) noted that U.S. crude oil stocks rose one million barrels to 362.3 million barrels.  Gasoline stocks saw a small increase of 309,000 barrels to 233.4 million barrels.  Gasoline demand fell by 295,000 barrels per day (bpd) to 8.03 million bpd, as might be expected due to inclement weather.  This may represent the lowest of the first six months of 2014 gasoline demand.

The Weekend

“Motorists have begun to feel some pain at the pumps in recent weeks, with gas prices jumping more than a dime nationally since the beginning of February,” said Tracy Noble, spokesperson for  AAA Mid-Atlantic. “AAA expects refinery maintenance issues (as refineries gear up to produce EPA-mandated cleaner-burning, more expensive summertime blends), coupled with rising crude oil prices, will likely cause gas prices to drift higher over the next two months.  However, with February more than half over and barring any unexpected market moving event(s), it is likely that sticker-shock in 2014 will be less severe for motorists than in recent years.”

 

The Week Ahead

Though prices at the pump will likely rise through spring, AAA expects the gas price peak to be lower than last year with the national average price of gas reaching an estimated $3.55 to $3.75 per gallon.  After a springtime peak, gas prices generally ease a bit as production returns to normal.  By late June, the national average could drop to $3.30 to $3.40 per gallon, which likely would be the lowest price until late autumn.  Last year, the national average reached a summer low of $3.47 per gallon on July 7.  Gas prices declined 61 cents from springtime peaks in summer 2012 and 44 cents in 2011.

 

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

02/21/2014

Week Ago

Year Ago

National

$3.39

$3.34

$3.78

New Jersey

$3.34

$3.27

$3.63

Trenton

$3.37

$3.32

$3.65

Cape May County

$3.34

$3.25

$3.61

Burlington County

$3.37

$3.26

$3.65

Middlesex, Somerset, Hunterdon

$3.34

$3.27

$3.63

Monmouth, Ocean Counties

$3.35

$3.27

$3.62

Crude Oil

$102.22 per barrel

$100.30 per barrel

$92.84 per barrel