Gas Prices: AAA’s Fuel Gauge Report | March 3, 2014
(WASHINGTON, March 3, 2014) Today’s national average price at the pump is $3.46 per gallon. This price is four cents more expensive than one week ago and 18 cents more than one month ago; however national prices remain 29 cents per gallon less than the same date last year. The national average has increased for 24 straight days – the longest streak since January 17-February 22 of last year. After widening to 39 cents on February 21 the year-over-year discount at the pump has closed 10 cents over the last 10 days.
Last year the national average peaked at $3.79 on February 27, the earliest peak on record. Gas prices are expected to continue to rise in the coming weeks due to seasonal refinery maintenance, which means the year-over-year discount will narrow further; however the national price at the pump is unlikely to surpass last year’s high and AAA expects it to peak between $3.55-3.75, barring any unexpected market moving events. The rapidly escalating geopolitical tensions with Russia in Ukraine could constitute such an event should global oil supply be impacted.
Geopolitical tensions in North Africa and the Middle East exacerbated the seasonal spring price increase in 2011 and 2012. In 2011, amid violence in Egypt and Libya, the national average increased 89 cents per gallon during a 94-day period before peaking at $3.98 per gallon on May 5. In 2012, on escalating tensions with Iran, the national average increased 56 cents per gallon over a 70-day period before peaking at $3.94 per gallon on April 5.
The rising national average is mirrored at the state level, where pump prices in every state are higher than two weeks ago. The interior of the country and west coast top the list of weekly increases as seasonal refinery maintenance gets underway. Motorists in 20 states have seen prices jump by at least a nickel per gallon over the past week, including two states (Illinois and Wisconsin) where prices have surged by more than a dime. As is usually the case, Hawaii ($4.10) posts the most expensive prices in the nation and it is currently the only state where drivers pay an average of more than $4.00 per gallon. California has the most expensive prices in the lower-48 at $3.86.
Rapidly escalating tensions in Ukraine, including reports that Russia had sent troops into the Crimean peninsula, have been a major story for the market today. At the close of today’s formal trading on the NYMEX WTI settled up $2.33 at $104.92 per barrel, which was the highest settlement price since September 19. While there has been no disruption to global supply, Russia (10.4 million barrels per day) is the third largest oil producing country after Saudi Arabia (11.7 million barrels per day) and the United States (11.1 million barrels per day) according to the most recent Energy Information Administration data. This will be an important issue to monitor as it develops and further escalation, including any disruption to global supply, could propel global oil prices higher, which has the potential to magnify the seasonal price increase at the pump.