National Pump Prices Likely Near a Seasonal Peak

After a steady increase in recent months, it is possible that national pump prices may be near a seasonal peak. Gas prices surged this spring due to a rally in crude oil prices from multi-year lows, seasonal refinery maintenance, the changeover to summer-blend gasoline and domestic refinery issues that have impacted regional production. Today’s national average of $2.75 per gallon is fractions of a penny higher than one week ago and 14 cents more per gallon than one month ago.

While pump prices have been rising, the national average price for regular unleaded gasoline remains significantly discounted versus this same date last year (-92 cents) and consumers are on target to pay the lowest prices at the pump during the summer driving season since 2009. Relatively low prices at the pump, combined with a recovering economy, have contributed to drivers traveling more during the first quarter of the year than any other year on record.

Locally, South Jersey drivers are playing an average of $2.49 for a gallon of unleaded gas, just a half-penny higher than last week. Today’s price represents an increase of 6 cents per gallon more than last week ($2.43), but it still nearly one dollar less than this time last year ($3.46).

There is the possibility that some consumers could see prices temporarily climb higher later this summer if severe weather impacts refinery production. The Atlantic hurricane season is officially underway and spans from June 1-November 30. This year’s season is expected to be below-normal, meaning between three to six tropical storms have a 70 percent chance of becoming hurricanes. These storms have the potential to disrupt production, refining and distribution. Shortages in supply could lead to regional price spikes and/or shortages in select markets should any tropical storms or hurricanes make landfall.

Midwestern drivers continue to face higher prices as a result of supply issues in the region. Another major refinery located in Toledo, Ohio is expected to be offline for two to three weeks while the fluid catalytic cracking unit is replaced, and prices in surrounding states will likely be impacted. This latest outage is in addition to ExxonMobil’s Joliet, Ill. refinery and Citgo’s refinery in Lemont, Ill., which are both running at reduced rates.

While Midwest prices are pointed higher, West Coast prices continue to lead the market by posting the nation’s highest averages for retail gasoline. California ($3.69) leads the market and is approximately 40 cents more per gallon than second place Hawaii ($3.30). Nevada ($3.30), Alaska ($3.30) and Washington ($3.06) round out the nation’s top five most expensive markets. On the other end of the spectrum, pump prices in the coastal states of Mississippi and South Carolina are the lowest in the nation, both at $2.44 per gallon.

Pump prices are relatively stable week-over-week, with averages moving by +/- 3 cents per gallon in 44 states and Washington, D.C. Weekly comparisons show that drivers in 37 states and Washington, D.C. are paying more to refuel their vehicles; however the increases were less dramatic than recent Fuel Gauge Reports. The average price is up by a nickel or more per gallon in four states: Ohio (+8 cents), Montana (+6 cents), Delaware (+6 cents) and Georgia (+5 cents). Of the 13 states where the price has fallen since one week ago, California (-7 cents) is the only state posting a discount at the pump of more than a nickel per gallon.

Consumers nationwide are paying more to refuel their vehicles month-over-month, and with the exception of California (+1 cent), the price has climbed by a nickel or more per gallon in every state. Retail averages have jumped by more than a dime per gallon in 36 states and Washington, D.C. over this same period, with the largest premiums per gallon paid by consumers in Ohio (+36 cents), and Illinois (+30 cents).

Yearly price comparisons continue to reflect significant discounts in the price at the pump and drivers in 48 states and Washington, D.C. are saving more than 50 cents per gallon. The only two states outside of this trend are the West Coast states of California (-43 cents) and Nevada (-50 cents) where the price for retail gasoline has recently climbed due to regional refinery issues. Averages are down by $1 or more in 12 states and Washington, D.C. versus this same date last year, with motorists in Michigan (-$1.16), Indiana (-$1.16) and Ohio (-$1.15) saving the most per gallon.

Both Brent and West Texas Intermediate crude oil prices rallied to close out this past week, following reports of violence in Saudi Arabia and weekly U.S. rig counts falling by double-digits. According to the U.S. Department of Energy, domestic gasoline demand is trending higher than in previous years but the impact of this increase on retail gasoline prices is uncertain. Additionally, it is generally expected that OPEC will sustain its current output levels when it meets on June 5 in Vienna, keeping the global market oversupplied in the near term and placing a ceiling on how high crude prices could move.

At the close of Friday’s formal trading on the NYMEX, West Texas Intermediate crude oil settled $2.62 higher at $60.30 per barrel.

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.