WASHINGTON -- The national average retail price for regular gasoline reversed course for the first time in more than four months, according to the Energy Information Administration (EIA). On Monday, the national average ticked up 2.4 cents per gallon (CPG) from the week prior to hit $2.07.
The agency said refinery outages tied to strikes in the Midwest and on the Gulf Coast helped pressure wholesale spot gasoline prices, and in turn, retail gas prices, at the end of January.
While higher than the previous week, this average is still $1.22 per gallon less than the same time period the year prior, EIA reported.
In the Midwest, the average price rose by 9 CPG to $2.03 per gallon, while on the Gulf Coast, it ticked up 1 CPG to $1.86. Other regions saw gasoline prices decline again--the East Coast was off 2 CPG to reach $2.09 per gallon, the Rocky Mountain region down 1 CPG to $1.87, and the West Coast declining less than 1 CPG to stay at $2.33.
The 17-week decline in gasoline prices was the largest percentage decline in the history of its weekly survey since gas prices fell 58% over 15 weeks in 2008, EIA said. And it was the longest consecutive decline since a 14-CPG drop over a 24-week span in 1995.
Gasoline prices in the United States typically follow those of North Sea Brent crude, the EIA said. This benchmark had fallen from $115 a barrel in June to $45 a barrel by mid-January, a nearly 58% freefall that stretched 143 trading days, said to be the longest such decline in 15 years. During this same period, spot gasoline prices in New York Harbor fell nearly 55%.
Click here to view the full EIA report.
"Many drivers are noticing an uptick in gas prices for the first time in months," said Avery Ash, a spokesperson for AAA, in a separate report. "It is typical to see gas prices increase this time of year due to refinery issues, yet hopefully the consumer impact will be less problematic given how low prices are today."
Gas prices have increased due to a combination of refinery issues and more stable crude oil costs. Refinery maintenance season is beginning and there also have been a number of refinery upsets, which can limit production. In addition, crude oil prices have stabilized, which has prevented any further declines in the price of gasoline.
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AAA expects gas prices to increase this month due to refinery maintenance and decreased production. It is not uncommon for gas prices to increase 30 to 50 cents per gallon between early February and the middle of spring, it said. Gas prices in February have increased during the previous five years by an average of 22 cents per gallon.
But gas prices should remain less expensive than in recent years due to lower crude oil costs. AAA does not expect the national average price of gas to rise above $3 per gallon in 2015.
It is possible that gas prices could rise more slowly or even drop if there are further significant declines in the cost of crude oil. At this point, the crude oil market remains very volatile and it is possible that crude oil supplies could build further during refinery maintenance season. A significant reduction in crude oil prices could limit any prices increases due to refinery maintenance.
Many refineries conduct maintenance and upgrades in the spring to prepare equipment for the busy summer driving season. This maintenance can reduce gasoline production at a time when both driving and gasoline demand rises as the weather improves.
"It's not uncommon for many to look at the headlines and assume that the jump in crude oil or the United Steel Workers strike (at nine refineries) triggered the price increases, but they're only peripheral issues," Gregg Laskoski, senior petroleum analyst with GasBuddy, said in a blog post (click here to read the complete report) . "Retail prices are rising as they always do in the first quarter for the same reasons year-in and year-out: Refinery outputs are reduced during a transition process necessitated by EPA mandates. A maintenance period begins between the time that winter fuel is depleted and before the cleaner-burning, more expensive 'summer-blend' gasoline production can begin. Much but not all of that maintenance is scheduled in advance."
"California and the Pacific Northwest now have the highest wholesale prices in the nation so some of the largest increases are expected in California … and that's due largely to the head-start our refineries get on that annual maintenance," said Allison Mac, a GasBuddy analyst based in Los Angeles. "While we saw West Texas Intermediate (WTI) jump to $54 per barrel [February 3], it would be a mistake to think that's a direct cause of what we're seeing this week. It's coincidental, but at the same time, we shouldn't overlook it since crude oil and retail gasoline prices move in tandem the majority of the time."
Gas prices remain relatively cheap across the country with more than half (52%) of U.S. stations selling gas for less than $2 per gallon today, AAA said. The most common price in the country is $1.999 per gallon. More than 6 in 10 stations were selling gas for less than $2 per gallon a week ago.
Drivers can find at least one station selling gas for less than $2 per gallon in every state within the continental United States. No stations in Alaska or Hawaii have reached that mark.
According to AAA, the five states with the lowest average prices today include Idaho ($1.85), Texas ($1.87), Oklahoma ($1.87), South Carolina ($1.87) and Utah ($1.87). The five states with the highest average prices today include: Hawaii ($3.11), Alaska ($2.64), California ($2.45), New York ($2.39) and Vermont ($2.30).
Twenty-five states have an average gas price below $2 per gallon, though this number has decreased from 28 states last week.
Click here to read the full AAA report.
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