Gas Prices Edge Upward as Midwest Refineries Slow Production
Gas prices started to move back up in several states this week, jumping by more than 20 cents in the Great Lakes area as some refineries cut back production to stem a growing stockpile of gasoline. The AAA Daily Fuel Gauge Report on Thursday said that the national average for regular gas was 2 cents higher than a week ago at $1.72.
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Motorists in the Great Lakes states, though, saw double-digit increases, with prices jumping 24 cents in Ohio, 26 cents in Michigan and 27 cents in Indiana. Regular gas averaged $1.45 a gallon or less in all three states a week ago. AAA said gasoline production nationally has started to drop in a typical pattern as refineries prepare for seasonal maintenance ahead of summer, plus some Midwestern refineries have cut back because of an oversupply and low prices.
“This decline in production has led to higher prices throughout the Midwest and slowed recent declines in the national average price of gas,” AAA said in a statement. “Industry analysts expect this year’s spring maintenance season to peak in April, and pump prices are likely to rise in the coming months due to fluctuations in supply and demand associated with this process.”
Gas prices had declined for 20 straight days before inching up on Monday. Diesel fuel, meanwhile, dropped by a penny the past week to $1.99, the first time the national average has been below $2 a gallon since September 2004. Diesel is 85 cents cheaper than a year ago. In comparison, regular gas is 55 cents cheaper and premium, at $2.22 a gallon, is 43 cents cheaper.
“Diesel prices generally reach the highest levels of the year in late winter, so what we are seeing in the market now is very unusual,” AAA spokesman Michael Green said in an email. “There is a glut of diesel around the world due to a weakening global economy and relatively mild weather this winter. Abundant supplies have helped push prices down at a time when we normally would see diesel costs surging higher.”
Despite an abundant supply of oil globally and low oil prices, analysts say pump prices are sure to rise during the spring as refiners switch to more-expensive gasoline blends and demand picks up.
“Typically, gasoline prices rise anywhere from 35-70 cents between March and May, and we are likely to see the national average back over $2 perhaps as early as March or April, thanks to refinery maintenance and the pressure behind transitioning to summer blends of gasoline, something that takes months to fully implement,” Patrick DeHaan, senior analyst at GasBuddy.com, said in a statement.
Regular gas averaged less than $1.50 a gallon in only three states on Thursday, down from seven a week ago. Oklahoma was lowest at $1.43, followed by Missouri at $1.46 and Kansas at $1.47. (Prices fluctuate throughout the day and could change.)
Five states remained above $2, with Hawaii the highest at $2.61. Unlike in the Great Lakes area, prices continued to fall in the West. Average prices for regular gas fell by 10 cents in California and Nevada the past week. Prices have dropped 41 cents the past month in California to $2.36 a gallon.
