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Gas prices moving higher alongside oil prices

The national average price for gas has moved up almost every day for three weeks.

By Daniel J. Graeber
Gas prices moving higher alongside oil prices
Retail gasoline prices continue to follow crude oil prices higher, rising each for for almost three weeks in a row. File Photo by hxdbzxy/Shutterstock

WASHINGTON, Dec. 20 (UPI) -- U.S. gasoline prices continue to rise along with crude oil, though some refinery issues and supply levels could create some fluidity, a retail market report finds.

Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.25 for Tuesday, up a fraction from the previous day and 4 cents, or 1.5 percent, higher than last week.

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Gasoline prices are moving in parallel to crude oil prices, which are 2.4 percent higher than this time last week.

"Prices continue to rise due to market expectations of tighter availability following the announcement of an OPEC deal to cut oil production that is scheduled to start in January 2017," AAA said in a weekly market report.

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The national average price for gasoline has increased for 21 out of the past 22 days. By region, the West Coast remains the most expensive in the nation, with California reporting the highest state average price for Tuesday at $2.67. Despite the trend, AAA reports prices are somewhat less regionally than they were one month ago, with California in the Top 10 when it comes to discounts from last month.

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AAA notes some refinery and pipeline issues in the region may elevate prices, though most of those, like BP's shutdown last week of its Olympic pipeline to Washington and Oregon, were resolved late last week.

Markets there could move quickly, meanwhile, on reports that gasoline production on the West Coast is at a one month high and almost 2 million barrels per day higher than last year.

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The Great Lakes states continue to hold the distinction of the most volatile market in the country, with some regions flipping almost 10 percent after posting steep declines. Illinois reports the highest price by region at $2.32 per gallon, a price that's more than 5 percent higher than last month. Part of the fluctuation may be in response to retailers looking to recover after the region was posting lower prices late last week. Michigan, for example, saw prices drop almost 6 cents, but move the opposite direction overnight.

AAA notes crude oil prices, and therefore gasoline prices, could move on market reactions to OPEC decisions. Already, some states previously pressured by lower oil prices like North Dakota are recovering and that could put a ceiling on how high oil prices could go because of supply-side dynamics.

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A December report from the U.S. Energy Information Administration said the national average price for retail gasoline should be around $2.10 in January.

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