Streak of Rising Gas Prices Ends at 40 Days

The national average price of regular unleaded gasoline fell yesterday for the first time since increasing for 40 consecutive days, which was the longest streak of daily price increases since 2011. During this period, average gas prices increased by 43 cents per gallon, but have fallen by a half cent since Saturday. While today’s price of $2.45 per gallon is three cents more than one week ago and 28 cents more than one month ago, pump prices continue to reflect a substantial yearly discount. Compared to the same date last year motorists are saving an average of $1.04 per gallon.

Locally, South Jersey residents are paying $2.25 per gallon of unleaded gas. This is an increase of three cents compared to one week ago, and 27 cents more than one month ago. However, today’s price is still $1.10 per gallon less than one year ago.

Retail gas prices typically trend higher this time of year as suppliers undergo maintenance and plan to reduce winter grade fuel in preparation for the changeover to summer-grade gasoline, which is more costly to produce. West Coast markets have seen particularly dramatic run-ups over the last several weeks due to a number of supply issues. An explosion last month at ExxonMobil’s refinery in Torrance, Calif. has kept that facility running at severely reduced rates. Production at Tesoro’s refinery in Martinez, Calif. also remains limited as it aims to restart after recent planned maintenance.

The result for motorists is a statewide average in California ($3.43) that is the highest in the nation and 30 cents more expensive than second-place Hawaii. Environmental regulations require the state to sell specialized blends of gasoline, which limits the state’s ability to substitute fuel from neighboring markets to overcome supply shortages. It also can be difficult for the West Coast to meet demand when there are refinery disruptions because there are no pipelines to major refining regions east of the Rockies. The West Coast is the most expensive region for retail gasoline with Alaska ($2.90), Oregon ($2.88) and Nevada ($2.88) rounding out the nation’s top five most expensive markets. Motorists in South Carolina ($2.16), Wyoming ($2.16) and Montana ($2.20) are paying the least per gallon to refuel their vehicles.

The majority of drivers nationwide are paying more to refuel their vehicles versus one week ago. Prices have moved higher in 45 states and Washington, D.C. week-over-week, led by the Rocky Mountain states of Idaho (+21 cents) and Utah (+21 cents). Motorist in 30 states are paying a nickel or more per gallon and the price at the pump has moved higher in six states by a dime or more per gallon in comparison to one week ago. Over this same period, the price at the pump has fallen in five Mid-continent states: Michigan (-13 cents), Indiana (-11 cents), Ohio (-10 cents), Illinois (-5 cents) and Kentucky (-2 cents). Two-week price comparisons reflect a similar trend with prices rising in 47 states. The most dramatic increases in retail averages over this two-week period have been on the West Coast. California (+48 cents), Oregon (+43 cents) and Washington (+40 cents) are joined by five additional states where drivers are paying more than a quarter per gallon versus 14 days ago.

Monthly comparisons show rising prices in every state and Washington, D.C. Twenty-seven states are paying an average of a quarter or more per gallon and the price has moved higher by a dime or more in 45 states and Washington, D.C. over this same period. Consumers on the West Coast have again experienced the most extreme jumps in price with California (+84 cents), Oregon (+66 cents), Washington (+63 cents) and Nevada (+57 cents) boasting month-over-month increases of more than 50 cents per gallon.

Year-over-year savings continue to erode as production challenges in California and seasonal refinery maintenance across the country pressure prices higher in many markets. The average price for retail gasoline remains cheaper in every state and Washington, D.C., however, the number of states posting a yearly savings of $1 or more (38 states) continues to diminish. California (-47 cents) is the only state where savings are less than 50 cents per gallon, and drivers in five states are saving more than $1.25 per gallon: Michigan (-$1.41), Indiana (-$1.36), Colorado (-$1.35), Illinois (-$1.32) and Ohio (-$1.27).

The global price of crude oil remains volatile due to speculations about possible production cuts due to oversupply and news of rising global demand. Absent any intervention from OPEC, global prices are expected to continue to fluctuate as markets attempt to self-regulate and find balance. U.S. production continues to hit record levels, and according to the EIA’s most recent report, stockpiles have climbed to their highest weekly levels since the energy agency started collecting statistical data on the subject in 1982. Abundant domestic supply has also kept the spread between WTI and Brent crude relatively wide. The gap in price currently stands at about $10 per barrel. Historically, when the global market is balanced, the disparity in benchmark pricing is around plus or minus $2 per barrel; however the spread has varied widely over the past several years.

At the close of Friday’s formal trading on the NYMEX, WTI closed down $1.15 settling at $49.61 per barrel.