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Steady U.S. gas prices mask underlying volatility

Looking ahead, one analyst said it's a myth to think the U.S. presidential election matters for gas prices.

By Daniel J. Graeber
Steady U.S. gas prices mask underlying volatility
Gas prices in the United States holding more or less steady, but don't expect much change after the U.S. presidential election, one analyst said. hxdbzxy/Shutterstock

WASHINGTON, Nov. 8 (UPI) -- Retail gasoline prices moved slightly lower on average over the last week, though U.S. infrastructure issues made for a volatile market, motor club AAA said.

AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.21, just a fraction of a percent lower than the previous day and relatively unchanged from last week. The retail market is volatile, however, with the spread between the highest state-wide average of $2.79 in California is more than 40 percent above the lowest state average in Missouri.

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AAA said some of the volatility was in part a response to issues affecting the oil and gas infrastructure in the country. Parts of the Colonial Pipeline, which were down following a deadly explosion last week, are just starting to return to service.

"While delivery of fuel has resumed, it may take a week before affected states see any relief at the pumps," the motor club said in its weekly retail market report.

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Looking ahead, the motor club said the southeastern states tied to the Colonial pipeline may face an uncertain future because of potential congressional scrutiny. Parts of the Colonial pipeline were closed in early September after a leak was discovered. That caused gasoline shortages in the region and major spikes in retail prices in the U.S. south.

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Meanwhile, a magnitude-5 earthquake in Cushing, Okla., which hosts the central oil storage facility for the country, may lead to some interim fluctuations as operators assess the integrity of their regional infrastructure.

Regionally, AAA said the West Coast continues with its distinction of having the highest prices in the nation, though prices there have been relatively stable as regional operators wrap up routine pipeline maintenance.

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Great Lakes states, meanwhile, hold the honor of the most volatile market in the country, with three states there having the largest price increase from last week. The region has suffered from problems at BP's largest refinery in the region and AAA said those states could see brief fluctuations in response to the Cushing earthquake.

On the market side, Patrick DeHaan, a senior analyst with GasBuddy.com, said any move from members of the Organization of Petroleum Exporting Countries could move retail prices in any direction, depending on what happens at a meeting next month in Vienna. On this Election Day, he said the outcome will likely have little impact on prices at the pump.

"It's important to dispel the myth: presidential elections do not affect gas prices," he said in an emailed statement.

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