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Gas prices at six-month highs

Rally in oil prices and higher demand causing pain at the pump, retail analysis finds.

By Daniel J. Graeber
Gas prices at six-month highs
Higher consumer demand and a rally in crude oil prices pushes retail gasoline prices to six-month highs, motor club AAA finds. File Photo by Terry Schmitt/UPI | License Photo

WASHINGTON, May 3 (UPI) -- High consumer demand and a recovery in crude oil prices means U.S. drivers are paying the highest for gasoline in more than six months, market analysis finds.

Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline of $2.22, up only a fraction of a percent from the previous day and 3.7 percent higher than last week.

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"Gas prices are at their highest levels in more than six months, and the national average has remained above $2 per gallon for 40 consecutive days," AAA said in a weekly retail market report.

With winter in the rear-view mirror, AAA said it's seeing consumer demand for gasoline "break seasonal records" as drivers take to the road. That adds to the pressure building from April's rally in crude oil prices, adding on to the price at the pump.

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Patrick DeHaan, a senior analyst with retail market analyst group GasBuddy, said consumer demand may be at its highest levels ever for the summer.

"Gasoline and oil prices have set new yearly highs as the imbalance of supply and demand may begin to shift as global oil production shows signs of slowing and gasoline demand is accelerating," he said in a separate emailed statement. "While oil inventories in the U.S. remain well-supplied for now, they are likely to start receding as refiners begin throttling up their operations after maintenance season."

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From AAA's perspective, the increase in retail gasoline prices is expected to continue into the summer. AAA said that its gauge of consumer sentiment showed most people are growing frustrated with the pace of increase. It found the "vast majority" of those surveyed don't characterize the current price at the pump as "cheap" and more than 35 percent of those asked said gas prices are "too high."

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That sentiment comes as gas prices for this date are their lowest since 2009. The retail price per gallon last year was $2.62.

Oklahoma had the lowest state average price in the nation at $1.98 per gallon.

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