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U.S. fuel prices see biggest Jan.-Feb. rise in 4 years

By
Renzo Pipoli
Gasoline prices rose as of March 4, compared to the previous week, as well as with the start of the year. Analysts say the gain during January and February is the highest since 2015. File Photo by John Angelillo/UPI
Gasoline prices rose as of March 4, compared to the previous week, as well as with the start of the year. Analysts say the gain during January and February is the highest since 2015. File Photo by John Angelillo/UPI | License Photo

March 5 (UPI) -- Average gasoline prices at service stations across the United States saw the biggest rise since 2015 for a January-February period, with an additional three cents per gallon added in just the last week, the AAA said.

Currently at $2.42 per gallon, gasoline prices are three cents higher than last week, but as much as 17 cents more than a month ago, according to the AAA drivers' organization.

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Oil prices saw gains in the first two months of the year, reaching their highest level in late February. Both gasoline and crude prices are lower than a year ago.

In addition to trailing crude oil gains, part of the price increase is seasonal, as refineries make changes to produce a more expensive gasoline mix that is sold in the warmer weather.

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"Motorists can expect gas prices to continue to increase as refineries gear up for spring gasoline production and maintenance season," said Jeanette Casselano, AAA spokesperson.

Florida saw the biggest weekly price change as prices increased 13 cents per gallon, followed by 11 cents per gallon in Alabama, with Mississippi and Louisiana both seeing an 8-cents-per-gallon increase.

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"Florida, at $2.47 per gallon, has seen a huge jump and carries the most expensive average in the South and Southeast," the AAA said.

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The South and Southeast have seen a large draw in gasoline inventories including a "staggering 2.1 million barrel" draw.

In contrast, the Rockies saw relatively little change in prices this week, with Colorado seeing a 5-cent-per-gallon rise.

Drivers in the Mid-Atlantic and Northeast saw moderate price increases on the week. Gasoline prices saw an average as high as $2.64 per gallon in Pennsylvania and as low as $2.20 per gallon in Virginia.

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Gasoline inventories "built by a healthy 1 million barrels to 68.6 million barrels," but refinery utilization continues to trend down -- it was at 60 percent on Monday, down from near 88 percent at the start of the year, due to maintenance.

In the Great Lakes and Central region, gasoline prices increased in most states anywhere from 1 to 10 cents. However, Indiana average prices saw a 10-cents-per-gallon decline. Inventories indicated a weekly draw of 911,000 barrels.

In the Rockies, there was "moderate" fluctuation. Colorado saw a 5-cents-per-gallon increase. Prices were flat in other areas like Wyoming, Utah and Idaho.

In the West Coast region, which also includes Hawaii, California and Hawaii had the highest prices of all states at $3.29 per gallon.

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The state with the lowest fuel prices in this region was Arizona, at $2.42 per gallon. Gasoline inventories only fell slightly on the week, the AAA said.

California and some neighboring states have stricter emission control policies compared with other parts of the United States.

Fuel sold in service stations across most of the United States is a combination of either RBOB, Reformulate Gasoline Blendstock for Oxygenate Blending, or CBOB, Conventional Blendstock for Oxygenate Blending. Some states use RBOB and others CBOB. California mandates a special formula named CARBOB.

These blendstock products are all naphtha obtained from crude oil. The naphtha is in most cases later mixed with about 10 percent ethanol, which is an oxygenate added so that the ending emission is cleaner.

RBOB gasoline futures for April delivery were quoted Tuesday morning at $1.76 per gallon. This compares with $1.57 per gallon on Feb. 26, and $1.34 per gallon on Feb.5, both for March delivery, according to CME Group data.

Ethanol, which is alcohol that in the United States is mostly derived from corn, was quoted Tuesday at $1.34 for March delivery, up from $1.31 per gallon on Feb. 26, and from $1.33 per gallon on Feb. 5.

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Looking ahead, Patrick DeHaan, analyst at GasBuddy which estimated gasoline prices at $2.43 per gallon on average as of March 4 while average prices of diesel were $3 per gallon, said prices will increase.

"We may see another 20 cent hike or so over the next two months, or perhaps greater if there are any refinery kinks that arise. We'll still be in good shape for summer gas prices to be under their year-ago levels, so all is not lost," he said.

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