Refinery maintenance season and a February ban on refined petroleum products from Russia should keep prices at the pump elevated. Photo by Jim Ruymen/UPI | License Photo
Jan. 20 (UPI) -- Retail gasoline prices continue to climb amid a broader rebound in commodities and the trend is expected to continue as consumer demand remains strong, motor club AAA said.
AAA put the national average retail price on Friday at $3.39 for a gallon of regular unleaded gasoline. That's up about 10 cents from week-ago levels, 25 cents higher than this time last month and 7 cents above year-ago levels.
Motorists last year had to cope with $5 gas because of supply-side strains from Western-backed sanctions on Russian crude oil supplies. Western economies in February will no longer take in refined products such as diesel and gasoline from Russia, setting the stage for another round of supply-side woes.
Demand in the U.S. economy, meanwhile, remains strong. Apart from inclement weather on the West coast, it's been a mild winter so far and travelers are undeterred.
"Rising gas demand has contributed to higher pump prices," AAA said. "If demand remains robust, drivers will likely see pump prices increase through the weekend."
U.S. federal data show demand is actually lower than year-ago levels, though total gasoline inventories are about 8% below the five-year average for this time of year.
Meanwhile, refineries are preparing for a seasonal maintenance period ahead of the shift to the production of the summer-blend of gasoline. Both should push prices higher -- refinery maintenance limits production and the summer-blend of gasoline is more expensive because of the additional processing steps necessary to keep it from evaporating during the warmer months.
Texas remains the only state in the nation with an average price below the $3 mark, but just barely at $2.99 per gallon. That price was close to the national average during the middle of December.
Prices at the pump should increase over the next few months, but are unlikely to hit the peaks from last year. The federal government put last year's average price at $3.97 per gallon and forecasts $3.32 for 2023.