AAA: 2018 kicks off with highest gas prices since 2014

At $2.49, the national gas price average is the most expensive seen at the start of a new year since 2014, when gas prices were more than $3 a gallon.

High travel volumes over the holidays drove gas prices up five cents on the week. At the start of 2018, motorists in the Northeast, South and the upper Midwest are seeing pump prices as much as 13 cents more expensive than last one week ago. 

“Although prices at the pump climbed over the holidays, motorists can expect gas prices to trend cheaper this month as we are likely to see a significant drop in gasoline demand,” said Tammy Arnette, Senior Public Affairs Specialist for AAA. 

The latest Energy Information Administration (EIA) report measures gasoline demand at a strong 9.5 million b/d, which is typical of the holiday season. However, historical data shows that in early January demand typical drops and stays below the 9 million mark for the first few months of the year.

On Friday, the final day of trading for 2017, WTI closed 58 cents up, reaching its highest price of the year: $60.42/bbl. Moving into 2018, prices are expected to continue rising as OPEC’s production reduction agreement will remain in place for the entirety of 2018.

2017’s increasing oil prices, especially in the fourth quarter, led to increased investment in production and drilling. This allowed the U.S. to reach its highest crude production level — 9.637 million b/d (October) — since April 1971, officially confirmed by EIA last week. This represents a roughly 10 percent gain from the same month in 2016 and a 167,000 b/d increase from September 2017. For 2018, U.S. crude production is expected to hit 10 million b/d for the first time ever, helping the country to meet domestic demand and expand its export prowess to countries that have growing energy demands around the globe. The total number of active rigs, 747, is 222 more than the total active number of rigs at the beginning of 2017. No active oilrigs were added last week, according to Baker Hughes, Inc.

Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.