Gas Prices: AAA’s Fuel Gauge Report | April 29, 2013
(WASHINGTON, April 29, 2013) Today’s national average price for a gallon of regular unleaded gasoline is $3.50. This price is two cents less expensive than one week ago, 14 cents less than one month ago and 32 cents less than one year ago. The last time that the national average was below $3.50 was February 2. While the national average price at the pump increased by fractions of a penny overnight, it had previously fallen for four consecutive days and 50 of the previous 61. The national average is currently 29 cents below the peak 2013 price to date of $3.79 on February 27. In 2011 the national average for regular unleaded gasoline peaked at $3.98 on May 5. In 2012 the price peaked at $3.94 on April 5 and 6.
Motorists in the vast majority of states have seen the price of gasoline continue to fall during the last week; however drivers in nine states (see graphic below), including parts of the Midwest, actually saw prices increase during this period. Analysts have noted that the region would be susceptible to price increases as regional refineries had yet to undergo seasonal maintenance and make the transition to summer-blend gasoline production, and recent storms and resulting power outages provided a catalyst for higher retail prices in the region. Gas stations in much of the country must make the retail switch to selling summer-blend gasoline by June 1, however refineries make the shift to summer blend in March and April in order to meet a May 1 production deadline. During this switch regional production is reduced and supplied markets are more sensitive to unexpected disruptions, as was the case during the recent storms in the Midwest.
On Saturday a fire and explosion at the Marathon refinery in Detroit raised new concerns of a possible disruption to regional supply, however a statement issued today indicated that the incident is not expected to have an impact on production. While it does not appear that this most recent event will contribute to higher prices for motorists, it highlights the likelihood that gas prices in the region will remain sensitive to any unexpected disruptions to production as we near the deadline for the switch to summer blend gasoline.
While retail gas prices have continued to fall nationally, crude oil prices have reversed their recent slide and jumped higher in the last week. One week after settling below $90 per barrel for the first time in 2013, West Texas Intermediate (WTI) crude oil began last week at $88.76 per barrel but rose sharply to end the week at $93. This increase continued today as a weaker dollar kept upward pressure on oil prices. Oil futures are traded in U.S. dollars and as the dollar weakens against foreign currencies, as was the case today, these futures become relatively less expensive to purchase and are a more attractive investment. At the close of today’s formal trading on the NYMEX, WTI settled up $1.50 cents at $94.50 per barrel.