AAA: Gas prices steady heading into summer

Motorists continue to see steady prices at the gas pump throughout the region, although in recent weeks gasoline prices have been a mixed bag throughout the country.  Prices have moved higher in some areas, primarily due to continued refinery issues, and lower in other areas, while remaining relatively steady across the Mid-Atlantic region.  The national average price for regular unleaded gasoline held at $3.63 per gallon Friday.  This is unchanged from the previous week, yet four cents more expensive than one month ago and ten cents more than the same date last year.  The national average was in the midst of a 61-cent tumble at this time last year — from a peak of $3.94 on April 5 and 6, to a summer-low of $3.33 on July 2 — so the year-over-year gap is likely to continue to widen in the coming days.

Crude oil broke through the $96 per barrel mark late week, after posting gains in six of the last nine trading sessions (through Friday).  The steady trend upwards was supported by positive economic data.  U.S. data showed stronger-than-expected retail sales and a fall in weekly unemployment claims.  U.S. retail sales increased 0.6 percent in May after edging up 0.1 percent in April.  The number of Americans filing new claims for unemployment benefits fell last week, nearing its lowest level in five years.  Demand continues to be lackluster.  On Wednesday, the International Energy Agency (IEA) said modest economic growth was limiting oil demand worldwide, and some developed economies would see absolute declines in oil consumption in 2013.  Crude oil settled at $97.85 at Friday’s close, up nearly two percent on the week.

In its weekly report, the Energy Information Administration (EIA) data showed crude oil stocks saw a build of 2.5 million barrels to 393.8 million barrels, which was greater than analysts’ expectations, putting crude at a high inventory level by any measure.  Gasoline stockpiles rose by a larger than expected 2.7 million barrels to 221.5 million barrels.  EIA data also showed U.S. weekly total petroleum demand measured at just 17.923 million barrels per day (bpd) last week, the second-lowest figure of 2013, and the most sluggish start for June since 1996.  However, the four-week average reading showed a smaller drop f 200,000 bpd below last year.  Gasoline demand slipped by 174,000 bpd from the previous week, which put it 482,000 bpd below the same week last year.  Year-to-date demand for gas is now 200,000 bpd lower than in 2012.

“While prices may tick higher in the next few days, AAA continues to expect lower prices as June continues,” said Martha M. Meade, Manager of Public and Government Affairs or AAA Mid-Atlantic.  “Prices should drop below a national average of $3.50 per gallon by the end of the month if refineries, particularly those in the Great Lakes, can transition smoothly from ongoing maintenance to full production.”

Gas prices have fluctuated throughout the country, rising in some regions and falling in others.  However, analysts believe the worst of such increases could be behind us as refineries get back online, which has been a driving factor in rising gas prices in many parts of the country this year.  This means prices nationwide should continue to decline through the remainder of the June.