OPEC rumors catch up with U.S. gas prices

WASHINGTON, Aug. 16 (UPI) -- Rumors of possible action from major oil-producing nations are spilling over to the retail sector, putting upward pressure on U.S. fuel prices, analysts said.

Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.12, relatively unchanged from one week ago and 4 percent less than one month ago. In its weekly retail report, AAA said stability overall masks volatility at the regional level.

"As is frequently the case, the Midwest features the most dramatic pump price movement in the nation, including the only five states posting a weekly price change of more than a nickel," it said.

Overnight, Michigan gas prices moved up nearly 2 percent, while Illinois was more muted with a 0.6 percent increase. Some of the pressure at the retail level there may be in response to the lingering impact of since-resolved issues at a BP refinery in Whiting, Ind., the largest in the region.

Crude oil prices, meanwhile, are up more than 10 percent from one week ago as rumors gain leverage over other market factors. A proposal to freeze crude oil production at January levels earlier this year went nowhere amid multilateral differences after months of speculation. AAA notes that, if there's an agreement to limit production at a meeting in Algeria next month, retail gasoline prices are lightly to buck seasonal trends and move higher.

The retail report from AAA adds, however, that some OPEC members are already producing oil at record-setting levels even as industry reports show the market is moving closer toward balance.

"As oil prices have continued to lift, gasoline prices may see additional slight increases in some parts of the country again this week, but overall, gasoline and diesel prices remain very low considering we're nearing the conclusion of the summer driving season," Patrick DeHaan, a senior petroleum analyst at GasBuddy, added in an emailed commentary.

The national average price for gas on this date last year was $2.66 per gallon. Because of similar issues at BP's refinery, Michigan gas prices last year were over $3 per gallon.