Demand factors push gas prices higher in the U.S.

July 11 (UPI) -- Though regional markets are mixed, the rise in consumer demand has led to a slight increase in retail gasoline prices in the United States, AAA reported.

Gasoline prices are 3.5 percent less than they were this time last month, according to the motor club, but higher than they were last week.

"Drivers are beginning to see increased prices at the pump mainly due to increased demand as a result of cheaper prices than usual for the summer driving season," AAA spokesperson Jeanette Casselano said in a statement.

Retail gasoline prices had moved lower for almost five weeks straight. For Tuesday, the motor club reports a national average price for a gallon of regular unleaded gasoline at $2.26, about 3 cents higher than last week. All told, more than half of U.S. states are reporting higher prices than last week and AAA said in its retail market report it expects the trend to continue through the rest of July.

"The moderate price surge follows a week of solid demand growth and a third straight week of gasoline inventory drawdowns across the country," its report read.

A federal report last week found total U.S. gasoline demand increased by nearly 2 percent from the week before.

By region, the West Coast bucked the national trend and reported slight declines in gasoline prices, though it remains the most expensive market in the country. Regional gasoline production last week was at its highest level in nearly a year. California, which has the highest gasoline prices in the Lower 48, reported a state average at $2.93, down a fraction of a percent from last week.

The Great Lakes region, typically the most volatile in the country, reported steep increases in the price at the pump. Gas prices in Michigan jumped more than 5 percent from last week for a state average of $2.41. AAA attributed the regional spike to a surge in demand.

A federal market report forecasts a national average price for gasoline during the summer driving season, which runs from April through September, at $2.46 per gallon. The full-year average is expected to be $2.38 per gallon.