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Gasoline prices increasing to start the new year

Refinery issues contributed to an increase in retail gasoline prices.

Cold weather at the end of December limited travel demand, but also curtailed activity at some of the nation's refineries. File photo by John Angelillo/UPI
1 of 3 | Cold weather at the end of December limited travel demand, but also curtailed activity at some of the nation's refineries. File photo by John Angelillo/UPI | License Photo

Jan. 3 (UPI) -- Retail gasoline prices started the new year off on the wrong foot for consumers, with data showing the national average for Tuesday up from week-ago levels.

Motor club AAA lists a national average retail price of $3.23 for a gallon of regular unleaded for Tuesday, an increase of 13 cents from this time last week. Analysts such as Patrick DeHaan, the senior petroleum analyst at Chicago-based GasBuddy, had expected to see the national average hit $3 at the end of December, though higher crude oil prices prevented the price at the pump from falling to that level.

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Federal data show the low point for 2022 was set on Dec. 29 at $3.09 and the high-water mark of $5.02 was set on June 14.

"For the first time in two months, the nation's average price of gasoline rose sharply last week, as extremely cold weather led to many refinery issues, shutting down over a million barrels of refining capacity, pushing wholesale prices up," DeHaan said on Tuesday.

Crude oil prices account for the bulk of what consumers see at the pump. Brent, the global benchmark for the price of oil, rallied some 4.4% on the last full trading day of the year to settle at $85.91 per barrel, nearly $10 per barrel higher than its low point for December.

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Federal data through the week ending Dec. 23, when prices were closer to $3.10 per gallon, show the total amount of refined petroleum products delivered to the market, a proxy for demand, averaged 20.8 million barrels per day. That's a slight improvement over levels during the similar week in 2019, to discount the impact of the COVID-19 pandemic.

DeHaan, however, estimates that during the week ending Jan. 1, demand declined by 13.4% from the prior week and was 12% below the four-week moving average. He attributed the slump to evidence showing motorists had filled up their tanks before the Christmas blizzard, crimping demand during the final week of 2022.

Federal estimates put the price for Brent crude oil at $92.36 on average for 2023, down from the $101.48 average for last year. Retail gasoline prices could reach $4 on average during the height of the summer vacation season, though the average is expected to come in at $3.51 for the year.

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