Gas prices across the country have seen significant jumps in the past few weeks, primarily due to refinery outages and issues. The national average has moved higher for 39 (through Friday) consecutive days, the longest streak of increases since February 2013, during which the national average has increased 43 cents. The national average price for regular unleaded gasoline rose to $2.46 per gallon Friday, nine cents higher than one week ago and 29 cents more than one month ago. Although the price at the pump remains at a significant discount in comparison to this same date last year, consumer savings continue to narrow and are currently at $1.01 per gallon, 24 cents per gallon below the peak savings of $1.25 per gallon on January 26. The 13-cent weekly increase is the largest spike since July 2013.
Volatility remains a central theme in the global oil market, and exports of increased production from Libya and a rise in exports from Iraq will likely keep global prices on the move. Though U.S. production companies are scaling back plans for exploration and production, stocks continue to build and production remains high. At the close of Friday’s formal trading on the NYMEX, crude oil settled at $49.55 per barrel.
The Energy Information Administration (EIA) noted in its weekly report that crude oil inventories were once again front and center, after a 10.3 million barrel build sent inventories to a modern record of 444.4 million barrels. Gasoline inventories were virtually unchanged at 240.1 million barrels. Gasoline demand took a step back last week, but for this time of year, demand is falling in line with where it was for the last three years. Gasoline demand dropped by 284,000 barrels per day (bpd) to 8.63 million bpd.
“Paying $2 for gas will seem like a distant memory for most drivers in the coming weeks,” said Tracy E. Noble spokesperson for AAA Mid-Atlantic. “Gasoline remains much cheaper than in recent years, but drivers may not appreciate that fact given the steep increase in price over the past month. AAA believes gas prices will likely rise higher in March as refineries continue to conduct seasonal maintenance. The good news is that most U.S. drivers should still pay less than $3 per gallon to fill up their cars this year.”
The Week Ahead
AAA believes the national average price of gas could rise by 20 cents per gallon or more in March as refinery maintenance season continues. Despite the expected increase, most regions should see prices remain much lower compared to recent years due to cheaper crude oil costs and above-average gasoline supplies. However, unfortunately for drivers, any additional unexpected refinery problems this month could lead to an additional temporary surge in prices because overall production is already down due to maintenance.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
|03/06/15||Week Ago||Year Ago|
|Cape May County||$2.26||$2.17||$3.37|
|Middlesex, Somerset, Hunterdon||$2.27||$2.19||$3.40|
|Monmouth, Ocean Counties||$2.28||$2.20||$3.40|
|Crude Oil||$49.55 per barrel||$49.23 per barrel||$101.56 per barrel|