AAA: Gas prices spring up this week

The national average for a gallon of gas continues to edge higher, although it remains at the low-end of AAA’s forecast to begin the year.  Peak pump prices are likely in sight for many drivers across the country; however, temporary spikes are not out of the question for motorists in a region that might be affected by an unexpected disruption.  The national average price at the pump jumped five cents on the week to $3.62 per gallon Friday, 13 cents more expensive than one month ago and six cents higher than a year ago.

Crude oil prices moved significantly higher this week.  Since closing at $99.62 per barrel on April 2, prices have advanced more than $3 per barrel, moving past $103 per barrel on Wednesday and registering the highest close in five weeks.  The commodity remains firm on a weaker U.S. dollar and the ongoing tensions in the Ukraine.  Unemployment claims reached the lowest level in seven years, a sign of economic recovery, and demand for gasoline was strong.  However these were non-factors in crude oil price movement.  Friday’s settlement of $103.74 per barrel marked a 2.6 percent increase on the week.

In its weekly report, the Energy Information Administration noted that U.S. crude oil stocks saw a 4 million barrel build to 384.1 million barrels, more than the expected 1.3 million barrel build.  Total U.S. gasoline inventories dropped 5.2 million barrels to 210.4 million barrels, dwarfing the 729,000 barrel draw that was expected.  Gasoline demand snapped back last week, and while still below the 9-million-barrels per day (bpd) level, the week ending April 4 was close at 8.996 million bpd.  Last week’s demand mark was also a little more than 500,000 bpd better than the same time last year. While current demand is hovering near 9 million bpd, in 2013, that level was not even threatened until mid-July.

“Although motorists nationwide have enjoyed lower year-over-year pump prices for nearly three months, that changed this week,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “However, peak pump prices are likely in sight for many drivers across the country as seasonal maintenance winds down.  AAA expects prices to peak: between $3.55 and $3.75 per gallon.”

AAA expects the national average gas price to creep higher entering the peak price range of $3.55 and $3.75 per gallon.  Prices may move a little higher in the coming weeks; however, the end to higher prices at the pump is likely in sight for many drivers across the country.

In its Summer Fuel Outlook report, the EIA noted it expects that during the April-through-September summer driving season this year, regular gasoline retail prices are forecast to average $3.57 per gallon.  Specifically, the projected monthly national average regular retail gasoline price falls from $3.66/gal in May to $3.46/gal in September.  The EIA expects regular gasoline retail prices to average $3.45/gal in 2014 and $3.37/gal in 2015, compared with $3.51/gal in 2013.

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)