The national average price for a gallon of gasoline is up again in the United States, rising 2 cents to $2.60 per gallon, while the average price for diesel has risen 2 cents to hit $3 per gallon, the first time it has seen such a level in 1,121 days.
“High oil prices continue to push gasoline prices to territory that Americans haven’t seen for years, aside from Hurricane Harvey last September,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “While oil production in the U.S. reaches highs not seen since the 1970’s, OPEC’s production cuts for the last year have weighed heavily on global inventories, mitigating any small rise in U.S. production. And the damage could get even worse with refinery maintenance season and the transition to summer gasoline on the horizon. This has been a storm brewing since the Obama administration legalized oil exports and OPEC decided to forgo market share to tighten global supply. All of this and more will lead to average gas prices being 25-50 cents per gallon higher by Memorial Day.”
Oil prices have weakened ever so slightly in the last week, likely at the hands of the first increase in U.S. oil inventories this year, according to the U.S. Energy Information Administration. Inventories rose by nearly 7 million barrels, yet stand over 76 million barrels lower than a year ago. The increase is likely due to refineries that are slowing down production as they begin their normal maintenance period ahead of the summer driving season. Refinery utilization slipped to 88.1%, its lowest level since October. Gasoline inventories fell as a result, shedding 2 million barrels and stand 6% lower than a year ago. U.S. oil production continued to show strength and now stands at its highest level since 1970, but the rise doesn’t come close to offsetting OPEC’s 1.8 million barrel per day production cut enacted to start 2017. Since then, over 650 million barrels of oil have remained off the market.
Looking state-by-state, the largest weekly changes in average gas prices were seen in: California (+7 cents), Michigan (+6 cents), Indiana (+4 cents), Nevada (+4 cents), Rhode Island (+4 cents), Florida (+3 cents), Washington (+3 cents) Kentucky (+3 cents), North Dakota (+3 cents) and Ohio (+3 cents).
States with the lowest average gasoline prices: Texas ($2.34), Mississippi ($2.35), South Carolina ($2.35), Alabama ($2.37), Arizona ($2.37), Oklahoma ($2.37), Arkansas ($2.38), Missouri ($2.39), Louisiana ($2.40) and New Mexico ($2.41).
States with the highest average gasoline prices: Hawaii ($3.39), California ($3.31), Alaska ($3.09), Washington ($2.97), Pennsylvania ($2.90), Oregon ($2.84), Nevada ($2.77), New York ($2.77) Connecticut ($2.76) and New Jersey ($2.71).
The national average may stabilize this week, contingent on no major surprises from Wednesday’s weekly EIA report as gas prices in most areas have largely caught up to the recent rise in crude oil prices and as refiners begin offloading winter gasoline at attractive prices ahead of the transition to summer gasoline.
Gasoline prices may begin a larger upward trend after Valentine’s Day as refineries will likely ramp up maintenance plans, thus reducing the amount of gasoline being produced and likely leading to higher prices. In addition, many areas of the country will begin the long transition to cleaner, more expensive summer fuel as the month wears on, so expect that prices may be higher by the end of the month, a trend that will continue into March.