The Week

March gas prices are going out just as they roared in– like a lion.  The national average price at the pump rose to $3.54 per gallon Friday, a penny above week ago prices, and 11 cents more expensive than one month ago.  Here is the one saving grace. The average price of gas is cheaper than it was at this point last year, when motorists were paying $3.65 per gallon, an 11-cent swing.  Despite the difference in year-over-year prices, the average pump price has increased on 46 of the past 49 days.

U.S. crude oil continued its upward trend this week, reclaiming the $100 per barrel mark for the first time in a week.  Support for the commodity came from geopolitical tensions between the U.S. and the European Union against Russia, stronger U.S. economic data and increased demand.  The U.S. and the European Union agreed to possible further sanctions against Russia for its actions in Ukraine.  The U.S. economy (GDP) grew faster than previously estimated in the fourth quarter and the number of unemployment benefit filings unexpectedly fell last week to its lowest level in nearly four months, signaling potential demand increases into spring and summer.  U.S. crude oil settled above the $100 mark Wednesday and Thursday, the first back-to-back triple-digit settlement since March 11.  Oil closed on Friday at $101.67 a barrel.

In its weekly report, the Energy Information Administration noted that U.S. crude oil stocks saw a 6.6 million barrel build, jumping to 382.5 million barrels.  Total U.S. gasoline inventories dropped a rather large 5.1 million barrels to 217.2 million barrels.  The sharp drop in gasoline inventories could most likely be blamed on tank turnover to make room for summer blended gasoline.  On top of the big draw, gasoline demand grew week on week to 9.002 million barrels per day (bpd), an increase of nearly a half-million bpd.  Last week's demand figure also represents the first 9-million-bpd mark of 2014, and the highest since just before Christmas.  For some perspective, gasoline demand in 2013 did not top 9 million bpd until late June.

The Weekend

“Increases at the gas pumps persist into April, as the national gas price average continues to climb from a low of $3.18 per gallon in mid-November to $3.54 Friday (up 36 cents),” said Tracy Noble, spokesperson for AAA Mid-Atlantic. “The recent upward movement in gas prices is typical for this time of year, as refineries change over to the more expensive summer blended gasoline.  However, such fluctuations aren’t always easy for motorists to take as they return to post-winter driving habits.”

The Week Ahead

On the national level, AAA expects prices will rise a bit more before peaking between $3.55 and $3.75 per gallon in the coming weeks. How much more prices rise will likely be dictated by the impact of seasonal refinery maintenance and any disruptions to production or distribution. As is the case each spring, refiners are required to switchover and produce summer-blend gasoline by May 1.  In 2011, the national average peaked at $3.98 per gallon on May 5. In 2012, the national average peaked at $3.94 per gallon on April 5. In 2013, prices peaked at $3.79 on February 27, which was the earliest peak on record. 

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

03/28/2014

Week Ago

Year Ago

National

$3.54

$3.53

$3.65

New Jersey

$3.37

$3.37

$3.47

Trenton

$3.41

$3.41

$3.54

Cape May County

$3.36

$3.36

$3.45

Burlington County

$3.34

$3.33

$3.43

Middlesex, Somerset, Hunterdon

$3.37

$3.37

$3.48

Monmouth, Ocean Counties

$3.38

$3.38

$3.48

Crude Oil

$101.67 per barrel

$99.46 per barrel

$96.58 per barrel