AAA: Gas prices making rapid climb
Gas prices in the Mid-Atlantic region continue their steady climb, mirroring the rise of prices nationally. Sunday’s national average price of $1.93 reflects a jump of 12 cents on the week, and 23 cents more per gallon versus one month ago. On the flip side, significant yearly discounts remain as pump prices are down 51 cents on the year. The national average, along with regional prices, will likely continue to move higher due to spring turnaround activity and reductions in supply in select regional markets.
Crude oil prices continue to rally as market fundamentals start pointing toward supply and demand coming more into balance in the nearer-term. WTI traded above $38 per barrel on Wednesday, its highest price since the beginning of the year, and settled at $38.50 per barrel at the close of Friday’s formal trading session on the NYMEX. This price represents a gain of $2.58 over last week.
“Despite the recent seasonal uptick in prices at the pump, this year’s spring turnaround has been characterized by lower-than-expected prices. This is prompting a number of refineries to adjust their maintenance schedules and/or cut production,” said Martha Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “The lower price of crude oil and abundant supplies should keep a ceiling on how high gas prices move in the coming months.”
Refineries are reportedly beginning to reduce production in preparation for the seasonal switchover to summer-blend gasoline. Prices generally move upward during this time of year and while prices are not expected to rise to last year’s level, the impact of this shift in production schedule, combined with other seasonal factors, may cause prices to swing at the regional level at a faster rate than normal as supply and demand seek balance.