Memorial Day Gas Prices Highest of the Year

The national average price for regular unleaded gasoline reached its highest price of the year on Memorial Day ($2.74) after rising for 39 of 41 days. Today’s average price of $2.74 per gallon is fractions of a penny less than yesterday. Drivers are paying three cents more than one week ago, eight cents more than two-weeks ago and 21 cents more than one month ago to refuel their vehicles. Despite the overall trend of rising averages, consumers paid the lowest prices at the pump for the holiday since 2010. Significant yearly discounts remain, due to relatively low prices for crude oil, with today’s national average representing a savings of 92 cents per gallon compared to this same date last year.

Pump prices have recently trended higher due to an increase in the price of global crude and localized refinery issues, particularly in the Midwest and on the West Coast. Although West Coast states continue to post the nation’s highest state averages, the most dramatic weekly increases have been in the Midwest, largely attributed to production issues in that market. ExxonMobil’s Joliet, Ill. refinery is continuing to operate at reduced production levels, and CITGO’s refinery in Lemont, Ill. is reportedly scheduled to conduct maintenance work in the coming days, which could also add additional volatility to the regional market. Motorists on the West Coast are not completely out of the woods, and the residual impacts of reduced supply could keep prices high in the coming weeks.

Locally, South Jersey motorists are paying an average of $2.49 per gallon of unleaded gas. This represents an increase of 2 cents per gallon compared to last week ($2.47), and 12 cents a gallon more than last month ($2.37). However, today’s price is 97 cents less than this time last year.

California ($3.76), Nevada ($3.32), Hawaii ($3.28), Alaska ($3.27) and Washington ($3.05) are the five most expensive markets for retail gasoline. A total of seven states, all in the western region, are posting averages above $3 per gallon. Drivers in South Carolina ($2.43), Mississippi ($2.44) and Oklahoma ($2.45) are paying the lowest prices at the pump, and their prices are discounted by more than $1.25 per gallon compared to California.

The impact of refinery issues is seen in both weekly and bi-weekly price comparisons. Week-over-week, the average price for retail gasoline has moved higher in 47 states and Washington, D.C. The Midwestern states of Illinois (+13 cents) and Ohio (+10 cents), are the only two posting double-digit increases over this period and the price is up by a nickel or more in a total of 10 states. California (-5 cents), the nation’s most expensive market, is outside of this trend and is joined by Oklahoma and Arizona where the price has fallen by fractions of a penny since one week ago. Two-week price comparisons also reflect this trend of rising prices. The average price for retail gasoline has increased in every state and Washington D.C., over this same period, and the most dramatic increases in price are Ohio (+23 cents), Illinois (+21 cents) and Michigan (+20 cents).

Monthly comparisons also reflect overall increases in the price of retail gasoline. With the exception of Florida (+9 cents), pump prices are up by a dime or more per gallon nationwide. The largest jumps in price are on the West Coast where refinery issues have impacted prices over a longer stretch, and drivers in Nevada (+39 cents), California (+38 cents) and Utah (+33) are paying the largest month-over-month premiums.

Compared to this same date last year, drivers nationwide are paying significantly less at the pump. The magnitude of savings has narrowed somewhat due to rising prices, and motorists in just 11 states and Washington, D.C. are now saving $1 or more per gallon – down 10 states since last week’s report. Ohio (-$1.13), Kentucky (-$1.12) and Michigan (-$1.12) are saving the most per gallon at the pump, while California (-37 cents) and Nevada (-46 cents) are the only two states with discounts below 50 cents per gallon.

Volatility is expected to continue to characterize global oil prices, with a number of variables potentially impacting the sensitive balance between supply and demand. Geopolitical tensions in the Middle East are persisting, largely due to violence by the so-called Islamic State in Iraq and Syria, which adds a level of risk to regional oil production. At the same time, the strength of the U.S. dollar is improving on the heels of improved inflation data. A stronger dollar makes crude oil relatively more expensive for those overseas, which puts downward pressure on prices. Both factors are likely to influence the global price in the near term and market watchers are closely monitoring the ultimate impact on the global price of crude.

At the close of Friday’s formal trading on the NYMEX, West Texas Intermediate crude oil settled $1 lower at $59.72 per barrel.