Gas prices climbed above $2 per gallon nationally for the first time this year. Gas prices have increased largely due to seasonal increases in fuel demand and reduced production as some refineries conduct maintenance.
Friday’s average price of $2.03 per gallon has drivers paying six cents more per gallon than a week ago and 31 cents more per gallon than a month ago. Despite retail averages rising, consumers continue to benefit from yearly savings and prices remain 39 cents per gallon cheaper than a year ago.
As the weather turns warmer and days grow longer, people tend to drive more, resulting in increased demand for gasoline. This increase comes at the same time that many refineries conduct maintenance to prepare equipment for the busy summer driving season, which leads to a temporary decline in fuel production. In addition, refineries also begin to transition to summer-blend gasoline, which is more expensive to produce, but mandated due to the fact that it is causes less air pollution at warmer temperatures. These factors typically lead to higher gas prices this time of year and have helped push prices higher in recent weeks.
At the close of Thursday’s formal trading session (markets are closed for Good Friday) on the NYMEX, WTI was up two cents from last week’s Friday close to settle at $39.46 per barrel. Global oil prices are expected to continue to move in response to ongoing discussions by some of the world’s top producers to potentially freeze production, which could be finalized at a meeting scheduled for April 17.
“Many families are traveling for Easter and take spring break road trips this time of year, which means they may use more gasoline than normal,” said Martha Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Even though prices locally and nationally have gone up in recent weeks, drivers can fill up their Easter baskets using the significant savings they are seeing at the pump. Motorists continue to pay the cheapest prices for gasoline for this time of year since 2004.”
Even though gas prices have risen by about 30 cents in the last month nationally, demand for gasoline is high and drivers don’t seem to be halting plans for road travel. Prices have now surpassed the $2 per gallon mark but are expected to stay 30 to 50 cents cheaper than in 2015, according to Tom Kloza, co-founder of OPIS. Kloza says that in the past six weeks, gasoline demand has been up nearly seven percent and he believes that 2016 may break the all-time record for gasoline consumption.
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