Prices at the Pump Continue to Rise as Summer Demand is Anticipated

Today’s national average price for a gallon of regular unleaded gasoline is $2.42, which is an increase of 13 cents over last month and 29 cents more than this time last year. As gas prices continue to reach new heights and hit an all-time high for the year, the summer demand has not kicked in, meaning consumers can expect the price at the pump to continue to rise for coming weeks. Based on recent American Petroleum Institute reports, U.S. gasoline deliveries in March were the second highest March deliveries ever recorded, confirming the forecast that demand is on track for the summer.

Locally, New Jersey motorists are paying an average of $2.39 for a gallon of unleaded gas. This is a 1-cent increase since last week ($2.38), and a 17-cent increase in the past month ($2.22). Today’s price is 45 cents more per gallon that this time last year.

Quick Stats

• The nation’s top ten least expensive markets are: South Carolina ($2.12), Oklahoma ($2.15), Mississippi ($2.17), Tennessee ($2.17), Arkansas ($2.17), Alabama ($2.18), Louisiana ($2.20), Missouri ($2.22), Virginia ($2.23) and Texas ($2.26)
• The nation’s top ten markets with the largest weekly increases include: Utah (+9 cents), Ohio (+7 cents), Idaho (+5 cents), Alaska (+5 cents), Massachusetts (+4 cents), Connecticut (+4 cents), Indiana (+4 cents), New Hampshire (+4 cents), Rhode Island (+4 cents) and Florida (+4 cents)

Mid-Atlantic and Northeast

This week, four states in the region landed on the top 10 list of biggest increases: Massachusetts (+4 cents), Connecticut (+4 cents), New Hampshire (+4 cents) and Rhode Island (+4 cents), while Pennsylvania ($2.64), Washington, DC ($2.55) and New York ($2.52) held their spot on the list of top 10 most expensive markets.

Consumers will likely continue to see gas prices increase as we enter the peak of summer driving season. Looking further ahead, there is early indication that the start of the Dakota Access Pipeline could impact Northeast gas prices with the potential for crude prices to rise as a result of more competition in the market looking to sell crude oil.

Oil Market Dynamics

At the close of trading last week, WTI crude oil futures fell $1.09 to settle just under $50 per barrel. One of the leading reasons for the drop was skepticism about whether the Organization of the Petroleum Exporting Countries (OPEC) and other producers would extend their pledge to cut output by 1.8 million bbl by another six months. In particular, the market is still unsure if Russia will agree to an extension deal beyond June 30, which could add dramatically to already bloated global inventories.

On Monday morning, U.S. petroleum futures were trading higher across the board, with WTI recovering after costly losses last week. This rebound follows last week’sEIA report that showed gasoline inventory building across the country, which can be attributed to higher import levels and blending activity. While spring stock-building is a normal trend to account for the peak summer demand, the counter-seasonal build is likely pressuring markets and increasing pump prices. Additionally, last week’s Baker Hughes oil rig count report showing the U.S. adding 5 rigs, bringing the total rig count to 688 -- is further evidence of increased U.S. production. Traders will look closely at this week’s numbers from key indicators of supply to determine if the market will rebalance in the near term.

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.