Gas prices rise for 19 straight days, but still $1.06 lower than year ago

(May 5, 2015) WASHINGTON — The national average price of regular unleaded gasoline has moved higher for 19 consecutive days for a total of 23 cents per gallon, due to higher crude oil costs and a number of refinery issues, AAA reported on Monday.

Today’s price of $2.62 per gallon represents the most expensive average price of the year. Motorists are paying eight cents more per gallon than one week ago and 22 cents more than one month ago to refuel their vehicles.

Although the national average is currently moving higher, relatively lower crude prices continue to provide consumers with significant year-over-year-savings and today’s price is $1.06 per gallon less than a year ago.

The price at the pump often increases in the spring due to seasonal maintenance, rising demand and the higher costs associated with producing more expensive summer-blend gasoline, which is required in many parts of the country to combat emissions in warmer temperatures. Unexpected refinery issues are also keeping upward pressure on the national average and consumers may see prices rise a bit higher over the next few weeks.

Despite this trend, retail averages are expected to continue to post significant year-over-year discounts, and barring any major supply disruptions, the national average is expected to remain below $3 per gallon throughout 2015, according to AAA.

The West Coast continues to lead the nation in posting the highest prices for retail gasoline due to regional refinery issues that have caused prices to race higher. California ($3.71) remains the nation’s most expensive market and is joined by three other states with averages above $3 per gallon: Hawaii ($3.19), Nevada ($3.17) and Alaska ($3.09). The majority of states (28 and Washington, D.C.) are posting averages above $2.50 per gallon.

Rising crude prices and increased seasonal demand are expected to keep upward pressure on the price at the pump in the short-term. South Carolina ($2.33), Missouri ($2.34) and Oklahoma ($2.36) are the nation’s least expensive markets for retail gasoline, but even these states have seen pump prices move higher over the last few days due to the aforementioned seasonal factors.

With the exception of Ohio (-6 cents), drivers in every state and Washington, D.C. are paying more for gas week-over-week. The price has climbed higher by a nickel or more in 40 states and Washington, D.C., and prices have increased by a dime or more per gallon in nine states over this same period. Weekly price comparisons show that drivers on the West Coast have seen the most dramatic moves in the price at pump, with the largest increases occurring in : California (+30 cents), Nevada (+23 cents), Arizona (+15 cents) and Oregon (+14 cents).

Monthly comparisons show that gas prices are up by a nickel or more in every state and Washington, D.C., and the majority of motorists (42 states and Washington, D.C.) are paying a dime or more per gallon. Motorists in California (+54 cents), Nevada (+38 cents), New Jersey (+34 cents) and Utah (+34 cents) are paying noticeably more at the pump versus one month ago. Gas prices have increased by a quarter or more per gallon over this same period in 12 states.

Despite recent increases, consumers continue to benefit in the form of yearly savings at the pump. Retail averages are down nationwide year-over-year and the price at the pump is discounted by $1 or more in 41 states and Washington, D.C. The largest savings are in Ohio (-$1.22), Kentucky (-$1.21) and West Virginia (-$1.20).

The price of crude rallied to close out the month, due to a slowdown in U.S. production, a weakening dollar and growing instability in the Middle East.

U.S. oil supplies remain at record highs, but the growth in production has reportedly slowed in recent weeks, which could indicate a new balance in supply and demand. The market also is focused on the Strait of Hormuz – a narrow waterway off the Iranian coast that provides access to major oil-exporting ports in the region. The U.S. is increasing its naval presence in the region after Iran unexpectedly seized a container ship attempting to pass through the strait.

Historically this strait has often been at the center of tensions between the U.S. and Iran, and with the two countries also attempting to reach a nuclear agreement by June 30, both sides are carefully weighing options and the perceived tension has put a bit of upward pressure on the global price of crude.

While WTI is at nearly a four month high, it is unclear whether oil prices will remain at this level. U.S. oil-drilling rigs have reached their lowest level since October 2010, and U.S. oil storage remains at an all-time high. Domestic oil production companies are keeping a watchful eye on the price and they could ramp up or resume production in order to capitalize on any upward movement.

Source: AAA