Gas Prices: AAA’s Fuel Gauge Report | September 17, 2012

(WASHINGTON, September 17, 2012) Today’s national average price for a gallon of regular unleaded gasoline is $3.86. This price is three cents more expensive than one week ago, 14 cents more expensive than one month ago and 26 cents more expensive than this day in 2011.  Today’s price is the highest ever for this calendar day.  While this continues a nearly month-long trend of daily records, today’s price is just fractions of a penny more expensive than the second highest national average for this day of $3.855 in 2008.

After increasing steadily from a July 2 low of $3.33, the national average price at the pump has now decreased for three straight days.  During this 54-cent run-up in prices, the national average increased 61 of 74 days and peaked most recently at $3.87 on September 14.  This price was seven cents below the year-to-date peak price of $3.94 on both April 5 and 6. Rising gasoline prices to begin July were largely driven by higher global crude prices centered on escalating geopolitical tensions with Iran.  At the end of July and throughout August regional prices moved higher as domestic supply and distribution issues took center stage, including a pipeline spill in the Midwest, refinery fire on the West Coast and Hurricane Isaac impacting Gulf Coast production.  Most recently prices again moved higher last week on volatility from the final days leading up to September 15, which marked the end of summer gasoline specifications for much of the country.

AAA continues to expect that pump prices will trend lower heading into the end of the year.  Since last Monday however, three additional states now average four dollars or more per gallon, which bring the total to ten.  A full list of these states is included below.  The last time that ten states had averaged more than four dollars per gallon was April 6 of this year.
Rising crude oil prices last week also made gasoline more expensive.  After trading relatively steady for several weeks, crude oil prices moved higher to end last week on reports of increased unrest in the Middle East and Thursday’s announcement of a third round of quantitative easing by the Federal Reserve.  This so-called “QE3” is designed to stimulate the sluggish U.S. economy through the injection of newly created U.S. dollars.  Commodities and equities markets rallied on this news to end the week and the value of the dollar decreased.  West Texas Intermediate (WTI) crude oil futures are traded in U.S. dollars, and as the dollar weakens against foreign currencies, oil becomes a relatively more attractive investment, which pressures prices higher.  Friday’s settlement of $99 per barrel for WTI marked the highest price since May 4 of this year.

The initial bullish sentiment following the announcement of QE3 diminished over the weekend, and attention refocused on bearish economic indicators both domestically and overseas, pressuring WTI prices lower today.  At the close of formal trading on the NYMEX, the price of WTI crude oil had fallen $2.38 per barrel to settle at $96.62.

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