WASHINGTON, Oct. 25 (UPI) -- Coordinated efforts from OPEC are partially behind what would otherwise be a period of historically lower U.S. gasoline prices, market analyses find.
Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.23 for Tuesday, about a half percent lower than last week. Year-on-year, the price for gas is about 1 percent higher, which rival analysis from GasBuddy.com finds is the first time that's been the case in nearly two and a half years.
Patrick DeHaan, a senior analyst with GasBuddy, blamed the year-on-year increase on the Organization of Petroleum Exporting Countries.
"The trend that has delivered consistently lower gas prices is showing signs of fading away as consistent discussion from both OPEC and non-OPEC members appears to be aligned for a likely production cut at the OPEC meeting in late November," he said in an emailed statement.
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Crude oil prices, which represent most of what consumers pay for gasoline, are up more than 10 percent, or $5.30 per barrel, since OPEC in late September proposed coordinated action on production in an effort to erase a gap between supply and demand. That gap, which surfaced in part in response to U.S. shale oil production, wiped nearly $50 per barrel off the price of oil over the last two years.
Oil prices have increased largely on speculation alone. Parties to the proposal, which some analysts doubt will lead to much, meet again in late November to consider formal arrangements.
AAA, meanwhile, said at least some relief was coming as a string of refinery problems in the United States get resolved.
On the West Coast, which is typically the most expensive retail market in the country, at least three refineries were reporting problems, though AAA said those issues should be resolved in the coming weeks and pull prices at the pump lower.
In the Great Lakes states, a market region that's typically the most volatile, prices at the pump collapsed after BP's refinery in Whiting, Ind., the area's largest, came back online at full strength following unscheduled maintenance. DeHaan, however, noted that wholesale prices there spiked last week and much of the recent savings have been erased.
DeHaan said much of what happens next depends on OPEC.
"If OPEC does follow through and cuts crude oil production, expect gas prices this winter to stay higher than last year," he said. "If OPEC doesn't cut production, gas prices would likely drop in many areas across the country."
The U.S. Energy Information Administration said it expects retail gasoline prices to average around $1.97 per gallon in January. The full-year average next year may be around $2.26 per gallon, against the expected $2.12 average for 2016.
