Retail gas prices moving sharply higher

Rally in crude oil prices and seasonal issues mean double-trouble for motorists.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  March 15, 2016 at 5:42 AM
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WASHINGTON, March 15 (UPI) -- A spike in oil prices, coupled with seasonal events at U.S. refineries, means gas prices should increase for consumers, but savings remain, analysis finds.

Motor club AAA reports a national average retail price for regular unleaded gasoline at $1.95 per gallon, a slight increase from Monday and 13 cents, or 7.4 percent, higher than last week.

Retail gasoline prices tend to follow trends in crude oil prices, which last week rallied back above the $40 per barrel mark on word U.S. output was on the decline. Refineries, meanwhile, are preparing to shift to a summer blend of gasoline, which is more expensive to produce because of the additional environmental safeguards necessary during summer driving months.

"Prices in some regions may move significantly higher in the near term due to fluctuations in local supply and demand associated with continued maintenance and preparations for summer-blend gasoline in advance of the June 1 deadline for retail facilities to sell the cleaner blend," the motor club explained in a weekly retail market report.

Negative pressure on crude oil prices, down more than 5 percent from last week's highs, could keep gasoline prices lower in the mid-term, however. Exploration and production trends continue to show weakness and last week, the U.S. Energy Information Administration lowered its long-term forecast for crude oil prices.

Patrick DeHaan, an analyst with consumer price watchdog GasBuddy, said seasonal pressures on retail gas prices should last at least another month.

"Perhaps the best news? Motorists still could see the cheapest average summer gasoline prices in over a decade," he said in an emailed statement.

The national average price for gasoline is 20 percent less than this date in 2015. New Jersey has the lowest state average price in the nation at $1.70 per gallon.

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