Retail gasoline prices hold steady as most markets remain flush with product, motor club AAA reports. File Photo by Gary I Rothstein/UPI | License Photo
May 16 (UPI) -- U.S. retail gasoline prices continued to move in the favor of consumers over the last week despite increases in oil prices and demand, AAA found.
The motor club reported a national average retail price for a gallon of regular unleaded gasoline at $2.34 for Tuesday, a fraction of a cent less than the previous day, about a penny less than last week and 7 cents, or 3 percent, less than one month ago.
Prices at the pump tend to climb as seasonal demand weighs on inventories. A summer blend of gasoline, which is more expensive to make because of the additional steps needed to prevent evaporation in warmer months, also works against consumers, though AAA reported relative stability so far.
"In coming weeks, the onset of summer travel is likely to increase demand which might help dip into high gasoline stocks," its weekly retail market report read. "However, it may not be enough demand to increase prices significantly."
The West Coast remains the most expensive market in the country, though California's $2.98 per gallon average is relatively unchanged from recent weeks. AAA said the gasoline inventories are "unseasonably high," though work at two California refineries could cause an increase in what consumers pay for gas in the coming weeks.
Reflecting the anomalies in a market known for unpredictability, the Great Lakes states were among the few posting increases in gasoline prices despite a glut of gasoline stocks. Indiana led the region with a 9 cent, or 4 percent, spike in retail gas prices over last week. This comes even though the region holds 2 million barrels more gasoline than it did this time last year.
The price of crude oil, meanwhile, is up more than 10 percent from last week and that usually would create a spike in prices at the pump. Saudi Arabia and Russia are in favor of extending an arrangement to keep supplies in check through early 2018 and that's made for a bullish market sentiment for oil.
"The expected result of OPEC's actions is far from certain," AAA's report read. "Until it is, drivers may continue to benefit at the pump -- even during the typically more expensive summer driving season."