Gas Prices: AAA’s Fuel Gauge Report | April 14, 2014
(WASHINGTON, April 14, 2014) Today’s national average price at the pump is $3.64 per gallon. This is six cents more expensive than one week ago, 12 cents more than one month ago, and 11 cents more per gallon than the same date last year. Last Wednesday, for the first time since January 17, the national average registered higher than the same date the year prior, and today marks the most dramatic year-over-year premium since August 1, 2013. On this date in 2013 prices were still tumbling from a February 27 peak, while this year prices continue to tick higher approaching the May 1 deadline to switch to summer-blend gasoline production. Considering these opposite trends, the yearly premium will likely continue to increase in the coming days.
With slightly more than two weeks remaining before refiners must switch to producing summer-blend gasoline, the national average is at the midpoint of AAA’s forecast made in the beginning of the year. Each spring, approaching the May 1 deadline for refineries to start producing summer-blend fuel, seasonal refinery maintenance and the changeover itself increases the chances that an unplanned disruption to production may take place. The increased incidence of disruption puts upward pressure on prices, and can send prices sharply higher in an area that is supplied by an impacted facility. These sorts of issues have been minimal so far this spring but should be watched as we count down to the switchover deadline. Also, suppliers tend to drawdown their supplies of gasoline at this time of year so as not to be left with higher RVP fuel that they can no longer sell after May 1. This has been on display in recent weeks, as gasoline stocks nationwide have dwindled.
Declining inventories coupled with signs of rebounding demand have resulted in rising prices across the country. Pump prices in every state but four (Wyoming, Alaska, Utah and Colorado) have moved higher over the last week, led by increases of more than ten cents per gallon in Illinois (+10 cents), Arkansas (+11 cents), Alabama (+11 cents) and California (+13 cents). While drivers in 12 states and Washington D.C. continue to pay less than a year ago – including more than 15 cent discounts in Arizona, Arkansas and Utah – motorists in the majority of states are paying a year-over-year premium. The most dramatic premiums in and around the Midwest, where drivers in four states pay an average price more than 20 cents per gallon above this date last year: Illinois +23 cents; Kentucky +25 cents; Indiana +25 cents; and Ohio +28 cents.
International geopolitical issues continue to keep global crude oil prices elevated. Tensions remain heightened in Ukraine following Russia’s annexation of Crimea and there are concerns that sanctions imposed by Western countries might impact exports from Russia. Additionally, while two Libyan ports have reopened in recent days, returning some of that country’s oil production to the global market, reports that Prime Minister Abdullah Theni has asked to resign following threats to his family are a reminder that significant tensions remain. At the close of formal trading on the NYMEX, West Texas Intermediate (WTI) crude oil settled 31 cents higher at $104.05 per barrel. Today’s WTI price is more than $15 higher than on April 15, 2013.