GAITHERSBURG, Md. –Against a backdrop of multi-year lows in crude oil prices, a massive spike has hit the Great Lakes and Midwest, likely a result of a major emergency shutdown of BP's Whiting, Ind., refinery. It was so massive in scope that it pushed a declining national average to suddenly spike eight cents per gallon versus last week, said GasBuddy.
“Obviously, the story about fuel prices last week was all about a massive spike in gasoline prices throughout the Midwest,” Patrick DeHaan, senior petroleum analyst for Gaithersburg, Md.-based gas-price service GasBuddy.com, said in a blog post.
“Prices have risen in Great Lakes states at paces rivaling and exceeding prior records, which I would pin on an unexpected emergency shutdown of a unit at BP's … refinery,” he said. “In addition, there have been other scheduled outages in the Midwest that may be leading to gasoline demand outpacing supply in the region, essentially causing panic on gasoline markets.”
He said that increases “have been witnessed across many states, though the epicenter of gargantuan hikes was centered in Michigan, Indiana and Illinois, where prices raced up by over 50 cents a gallon in mere days.”
Also seeing spikes over 25 cents: Ohio, Wisconsin and Kentucky, while Minnesota, Oklahoma, Missouri, Kansas and Iowa saw prices jump over 10 cents a gallon.
“At this point, it does appear that most of the price shocks are behind us, though if there are any curve balls that hit the market, all bets are off. Outside the Great Lakes, most regions are seeing gasoline prices decline. Leading decliners are New Jersey and Oregon, with Washington coming in third,” DeHaan said.
Motorists will likely see some relief in the Great Lakes and Midwest this week, he said, as additional supplies head for the region and as oil prices remain on a downward trajectory. So long as BP's Whiting refinery returns to normal operations in a few weeks, gasoline prices have likely peaked for the time being, with the national average set to “restart” its downward trend.
Week-over-week the average price at the pump has climbed higher in 20 states, according to a separate report by AAA. Its data shows that motorists in Indiana have seen prices jump by 59 cents per gallon over this period, and similar price surges occurred in the neighboring states of Illinois (up 56 cents), Michigan (up 51 cents), Ohio (up 44 cents) and Wisconsin (up 39 cents).
On the other end of the spectrum, prices are down in 30 states and Washington D.C., and have fallen in a less dramatic fashion with the largest declines in New Jersey, Rhode Island and Delaware, all down five cents per gallon.
Retail averages on the West Coast also remain volatile due to changes in the balance between supply and demand, AAA said. California ($3.58) remains the nation’s most expensive market for retail gasoline, joined by Alaska ($3.47), Nevada ($3.22), Hawaii ($3.20) and Illinois ($3.16) as the nation’s top five most expensive markets.
Consumers in South Carolina ($2.18) and Alabama ($2.21) are paying the nation’s lowest averages at the pump.
Click here to read the full GasBuddy blog. And click here to view the full AAA report.
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