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U.S. gas prices holding steady

This could be the seasonal low point ahead of summer driving season.

By Daniel J. Graeber
U.S. gas prices holding steady
Retail market analysis finds relatively stability at the gasoline pump for U.S. consumers. Photo by Gary I Rothstein/UPI. | License Photo

Feb. 21 (UPI) -- Weak consumer demand is offsetting volatility in oil prices and leaving retail gasoline markets relatively unchanged in the United States, analysis finds.

Consumer price-watcher GasBuddy.com reports a national average retail price for a gallon of regular unleaded gasoline at $2.28, relatively unchanged from one week ago. Their analysis from last week, however, found this may be the seasonal bottom for retail gasoline prices.

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"Even as oil prices continue their seemingly confused sideways price pattern, weaker domestic gasoline demand and refiners moving to liquidate winter gasoline inventories in advance of their gradual switchover to summer blends sets the stage for higher prices in the weeks ahead," petroleum analyst Dan McTeague said in a statement.

Refiners during winter months use a blend of gasoline that's cheaper to make because fewer environmental safeguards are necessary during colder weather. That reverses during the summer and, coupled with increased vacation travel, pushes the price at the pump higher.

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The West Coast remains the most expensive market in the region, with California holding the distinction of the state in the Lower 48 with the most expensive gas at $2.90 per gallon. With refineries in preparation for the shifting blends for summer, the region also saw some of the largest increases.

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On the other hand, the Great Lakes states continued their streak of volatility, with Michigan leading the pack with a decline in retail gasoline prices of 6.8 cent to $2.29 per gallon. That regional pattern could indicate refiners are unloading their winter stockpiles and GasBuddy reported that gasoline supplies in the region are moving lower.

Oil prices, which account for slightly more than half of what consumers see at the gasoline pump, are trading still in the range of $55 per barrel. That could in part explain the relative stability for consumer gas prices. Oil prices are balanced by competing trends as members of the Organization of Petroleum Exporting Countries trim production to balance the market, which because of the subsequent gain in oil prices is bringing more producers to expensive areas like U.S. shale.

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