The national average has risen just 0.3 cents in the last week to $2.49 per gallon today as an upward trend appears to finally be losing steam.
“As unseasonable cold finally breaks across the country, what may not break as quickly as the unseasonably high gas prices,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “Prices at the pump are higher than they were nearly all of last summer, mainly because oil prices remain high and due to the extreme cold weather that caused some snafus at refiners. Inventories of refined products have seen an impressive build in the last week, and there’s a strong likelihood that we may soon begin to see the national average falling toward the end of the month. I must caution motorists, however, that any downturn would likely be short-lived as gas prices typically begin moving higher after the sweetness of Valentines Day has worn off as refiners begin maintenance and the long road to summer gasoline begins.”
38 of the nation’s 50 states saw average prices rise over the last week, though all but 10 states saw average gas prices change by 2 cents per gallon or less. Great Lakes states led decliners as the region saw some downward movement in wholesale gasoline prices as refinery issues largely abated. Nearly all states that saw gas prices decline were either in the Great Lakes or Rockies regions, while every state in all other regions saw prices rise slightly. Crude oil prices opened the week by inching forward to $61.52 per barrel, among the highest levels in close to three years, mainly due to a large drop in crude oil inventories.
According to the Energy Information Administration in last week’s report, oil inventories tumbled by 7.4 million barrels, leaving them nearly 55 million barrels under a year ago. However, it was thanks to refineries inputting record amounts of oil, churning out refined products at amazing pace. Gasoline inventories jumped by nearly 5 million barrels while distillate inventories, made up of heating oil and diesel, gained nearly 9 million barrels even amidst high demand due to cold weather. In addition, implied demand for fuels plunged to 8.6 million barrels per day, a drop of nearly 1 million barrels per day versus the week prior. To finish 2017, the EIA reported yearly demand of 0.9% below 2016.
Looking state-by-state, the largest weekly changes in average gas prices were seen in: Indiana (-7 cents), Michigan (-7 cents), Ohio (-5 cents), Minnesota (+4 cents), Connecticut (+4 cents), Alabama (+3 cents), California (+3 cents), Illinois (-3 cents), Idaho (+3 cents) and Kentucky (-3 cents).
States with the lowest average gasoline prices: Missouri ($2.21), Arkansas ($2.23), Oklahoma ($2.23), Alabama ($2.25), South Carolina ($2.25), Mississippi ($2.25), Texas ($2.26), Tennessee ($2.27), Kansas ($2.27) and Louisiana ($2.27).
States with the highest average gasoline prices: Hawaii ($3.30), California ($3.17), Alaska ($3.06), Washington ($2.88), Oregon ($2.77), Pennsylvania ($2.76), Nevada ($2.73), Connecticut ($2.69), New York ($2.67) and Michigan ($2.61).
Gasoline prices are likely to be a mixed bag in the week ahead. Great Lakes states will likely see prices jump due to a regional price behavior called price cycling, while price trends may change little as we approach a short-term peak at the pump. In the weeks ahead, the national average is likely to begin trending lower as winter gasoline inventories surge and as refiners will soon offer “discounts” to move these fuels out of their systems to make way for the eventual transition to summer blends of gasoline- a transition that takes months, with several intermediate blends of gasoline before the full on summer specification begins showing up in May.