AAA Fuel Gauge Report | August 6, 2012
(WASHINGTON, August 6, 2012) Today’s national average price for a gallon of regular self-serve gasoline is $3.62. This price is 13 cents more expensive than one week ago and 24 cents more expensive than one month ago. The national average is 29 cents higher than the summer low of $3.33 on July 2 but is 32 cents below the year-to-date peak price of $3.94 on April 5. After falling for 75 of 77 days prior to the July low, the national average retail price has now increased for 32 of 35 days.
The increasing national average over the last month highlights the broad trend of higher pump prices due to rising global crude oil prices, much more expensive domestic ethanol as a result of the current Midwestern drought and an increase in demand due to the summer driving season. However, looking at prices for individual states during this period reveals that regional price trends have varied dramatically.
As headlines focused on the largest July increase for the national average retail gas price in more than a dozen years, drivers in Alaska, Hawaii and the Western U.S. have actually seen prices decline over the last month. This price relief has come as refining and distribution issues have been resolved. The onset of these issues had pressured prices in the region higher late this spring even as the national average retail price was falling. The downward pressure on regional prices from these issues being resolved has been enough to outweigh the upward pressure on prices that has sent the national average higher over the past month.
Motorists in the 41 states and the District of Columbia east of the Rocky Mountains, on the other hand, are acutely aware of rising pump prices over the past month. This increase has been most dramatic in the Midwest and Washington, D.C., where average prices have increased by at least 38 cents (Ohio – 38 cents, D.C. – 38 cents, Ind. – 43 cents, Mich. – 44 cents, Wis. – 45 cents and Ill. – 49 cents). These increases have significantly outpaced the rising national average, as refinery and distribution issues have put additional upward pressure on prices in the Great Lakes region, much as similar issues on the West Coast pressured prices higher there in May as previously described. This is an all too familiar story for these Midwestern and D.C. drivers who reside in six of the seven states that paid all-time record high state prices in May 2011, while the national average rose to a peak of $3.98 on May 5 — below the all-time national record of $4.11 on July 17, 2008. As is the case this year, the amplified price spike in the Midwest in 2011 was due to a spate of supply and distribution issues in that region.
While the national average price has risen at a seasonally historic rate over the last month, motorists may have still felt some relief as pump prices have remained below year ago levels. For more than 100 consecutive days the national average has been below that of the same day in 2011. This year-over-year price relief widened to nearly 28 cents on July 16 before narrowing dramatically to less than seven cents today. Based on current trends, it is reasonable to expect that this period of lower year-over-year prices may come to an end in the coming weeks. Prior to this recent streak, the last time the national average price at the pump had been cheaper than the year prior was October 26, 2009.
After 85 days as the cheapest state to buy gasoline, South Carolina ceded this distinction to Arizona on Saturday. Drivers in South Carolina currently pay an average of $3.33 cents, while drivers in both Arizona ($3.28) and New Mexico ($3.32) now pay less at the pump. The most expensive gas in the continental U.S. is in Illinois, which has a state average of $4.06 and joins Hawaii as the only states with an average price of more than $4 per gallon.
While the national retail price for gasoline continued to rise, global oil prices remained relatively flat last week for the third consecutive week. After both domestic and international economic concerns pressured oil prices lower during the first four days of trading last week, prices reversed this decline on Friday and surged back above $90 per barrel on a positive U.S. jobs report and weaker dollar. A growing economy, both domestically and overseas, would be expected to consume more crude oil, which puts upward pressure on prices. Additionally, because oil futures are traded in U.S. dollars, a weaker dollar means futures are relatively less expensive to purchase and are therefore a more attractive investment.
At the close of today’s formal trading on the NYMEX the price for WTI crude oil had risen even further, increasing 80 cents to settle at $92.20 per barrel.