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Modest spike for gas prices before fall drop off

Volatility in oil prices catches up with consumers, but don’t forget the $4 gas in 2011, AAA says.

By Daniel J. Graeber
Modest spike for gas prices before fall drop off
Retail gasoline prices move modestly higher, but seasonal factors moving in favor of consumers, a market report finds. File Photo by Ismael Mohamad/UPI | License Photo

WASHINGTON, Sept. 13 (UPI) -- Short-term spikes aside, retail gasoline prices in the United States should be moving lower as refiners switch to a cheaper blend, market analysis finds.

Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.18, relatively unchanged in recent days, but about 2.5 percent higher than one month ago.

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Crude oil prices over the past few weeks have been volatile, with wide swings in gains and losses. Pressures on operations in the U.S. Gulf of Mexico from Tropical Storm Hermine are starting to spill over to the consumer level for gasoline.

The Great Lakes states, which together make up the most erratic market in the country, had experienced the biggest weekly discounts, though prices have moved in the opposite direction in recent days. Michigan, which recorded one of the steepest drops in gasoline prices, witnessed prices move 3.5 percent higher overnight in some markets as retailers capitalize in part on Hermine.

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States on the West Coast, which together make up the most expensive market in the country, are feeling pain at the pump because of limited supplies. While less costly than last year, six of the 10 most expensive markets in the nation are western states, which are facing supply pressures because of refinery problems in California.

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Nevertheless, AAA reminded drivers who may be frustrated with rising prices that the average cost for gasoline is about 18 cents per gallon less than it was one year ago and more than $2 per gallon lower than recent peaks in 2011.

Looking forward, AAA said gasoline prices usually drop off in the latter months of the year because demand drops off after the Labor Day holiday in the United States. Starting Thursday, refiners start to make a winter blend of gasoline, which is less expensive to make because of fewer environmental steps necessary to inhibit the release of some of the vapors associated with fuels.

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"AAA predicts that consumers could experience national average prices below $2.00 at the pump if the price of crude oil remains relatively low and refineries are able to conduct planned seasonal maintenance without issue," the motor club said in its weekly retail market report.

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