The party is over…for now. The national average gasoline price has jumped 4.2 cents per gallon in the last week to $2.33 per gallon today, according to price-tracker GasBuddy.com.
“We long anticipated seeing gasoline prices beginning to rise en masse in the spring, but uncharacteristically, it took until nearly April Fool’s Day for it to begin. There’s no fooling this time- the rally in prices does seem to be more credible as oil and gasoline markets rebound,” said Patrick DeHaan, senior petroleum analyst for GasBuddy.com.
As for explaining the rally, DeHaan said “Last Wednesday’s weekly report from the Energy Information Administration provided some energy for the storms to develop at gas pumps based on a weak showing in crude oil inventories- barely increasing as supply and demand finally see more balance, pushing oil prices higher. Motorists should expect to see a more sustained upward trend at the pump through Memorial Day, but thankfully the seasonal rise could still be less severe than what we’ve seen in prior years.”
Oil prices closed last week above $50 per barrel for the first time in several weeks with wholesale gasoline prices following in tow as energy prices lifted amidst sentiment that along with a decline in crude oil inventories, the market was coming into a better balance between supply and demand.
Nevertheless, average gasoline prices fell 1.5 cents per gallon during the start and end of the first quarter of 2017, the first such decline since at least 2008. Gasoline prices rarely, if ever decline between the start of the year and close of the first quarter as prices typically begin to spike in late-February due to refinery maintenance and the transition to summer gasoline. So far this year, there have been few unexpected refinery outages and a relatively smooth transition, leaving gasoline prices in somewhat of a limbo. In addition, crude oil inventories had continued to increase, putting downward pressure on oil prices.
The rally at the pump was felt in all but four states: Utah (down 3 cents), Idaho (down 2 cents), Hawaii (down one cent) and California (unchanged), leaving 46 states that saw gasoline prices rise. Leading the nation higher was Ohio (up 19 cents), Michigan (up 16 cents), Indiana (up 15 cents), Illinois (up 12 cents) and Wisconsin (up 8 cents). The Great Lakes saw prices slingshot higher as clearance sales for winter gasoline began evaporating ahead of the final step in the transition to summer gasoline. A similar spike was noted a few weeks earlier in the region in 2016.
While the gasoline price climate has heated up in the last week, 8,235 of the nation’s gas stations are selling today at $2 per gallon of less, a drop from 13,905 stations a week ago. The bulk of these stations are in the states with the lowest overall gas price averages: South Carolina ($2.03), Oklahoma ($2.07), Tennessee ($2.07), Mississippi ($2.08) and Alabama ($2.09). Nearly half of the nation (22 states) still saw average gasoline prices under $2.25 per gallon.
With oil prices having rallied much of last week, it’s likely motorists will continue to gasoline prices rising in the week ahead pending the outcome of Wednesday’s weekly report from the Energy Information Administration.