Gasoline prices have familiar look as summer nears

For third year in a row, national average will be within a penny or two of $3.64 per gallon.
Associated Press
May 24, 2014

The price of gasoline looks familiar this Memorial Day. For the third year in a row, the national average will be within a penny or two of $3.64 per gallon.

Stability wasn't always the norm. Between 2003 and 2008 average retail gasoline prices more than doubled, reaching an all-time high of $4.11 per gallon in 2008. Prices then collapsed as the U.S. plunged into recession. But after a two-year run-up between 2009 and 2011, the price of gasoline has remained in a range of roughly $3.25 to $3.75 per gallon.

Drivers can handle that, according to AAA, and are ready to head out for Memorial Day driving trips in the highest numbers since 2005. "It is unlikely that gas prices will have a significant effect on travel plans compared to a year ago," AAA wrote in its annual Memorial Day forecast.

Steady gasoline prices are largely the result of relatively steady crude oil prices, even though there has been a long list of global supply disruptions and political turmoil that that typically would push the price of oil higher.

Sanctions have sharply cut output from Iran, once the world's third largest oil exporter. Libya went through civil war, and labor and political disruptions continue to limit its exports. Venezuela's oil output has been steadily declining for a decade. Most recently, the conflict between Russia and Ukraine is raising concerns that sanctions will impact production or exports from Russia, the world's second largest exporter after Saudi Arabia.

But rising crude output in countries such as the U.S., Canada and Brazil have offset the declining supply elsewhere, helping to keep prices steady.

Approaching this Memorial Day, the national average is $3.65 per gallon, according to AAA, OPIS and Wright Express. Last year on the holiday it was $3.63 per gallon. In 2012 it was $3.64.

The story is similar with other fuels. Through the first quarter of this year airlines are paying $3.03 per gallon for jet fuel — exactly the same they paid on average for all of last year, according to the Bureau of Transportation Statistics. The average price of diesel, $3.93 per gallon, is a nickel higher than last year.

Averages only tell part of the story, though. Tom Kloza, chief oil analyst at the Oil Price Information Service and Gasbuddy.com, compares the national average price of gasoline to the average temperature of the country — outside your door it's almost certainly hotter or cooler than the average.

This year, drivers in the Midwest, Great Plains states and the Rockies are paying quite a bit less than they did a year ago on Memorial Day weekend. The Minnesota average of $3.49 is 78 cents lower than last year, the biggest drop in the nation. Drivers in North Dakota, Nebraska, Oklahoma, Iowa and Kansas are all paying at least 50 cents per gallon less.

That's because last year some big Midwest refineries were taken offline to be upgraded to handle cheaper Canadian crude oil. That work is done and the refineries are churning out a lot of fuel, pushing down prices in the region.

The story is different on the coasts, though. Refineries there have to pay higher prices for global crude, and more refineries are seeing downtime in Texas and Louisiana than in recent springs, according to Kloza. Gulf coast refiners supply much of the nation, and especially the coasts, with fuel.

Pennsylvania drivers are paying $3.77 per gallon on average. That's 27 cents higher than last year, the biggest increase in the country. Drivers in the Carolinas and Alabama are paying at least 20 cents more than last year, though they are paying less than the national average.

As usual, California drivers are paying the most in the lower 48 states, at $4.15 per gallon, about 10 cents higher than last Memorial Day weekend.

Across the nation, all U.S. drivers will likely be paying less in the coming weeks, the result of a typical seasonal decline between late spring and early summer.

"Temperate-to-lower prices is the most likely path for the next couple of months," Kloza says. "And then in hurricane season you just cross your fingers."

 

Check Sunday's Register for a local story on gas prices and holiday travel.

 

Comments

ladydye_5

I think stories like this are a bunch of crap. When they can put a story out the day before about how travel will be the highest that it has ever been and then the price of fuel jumps...it is nothing more than GREED. Pure and simple. They make up stories about the price of gas and the penny or so it is down .....talk about the biggest travel weekend of the century and the, low and behold...here is the story of why gas is so HIGH. It is all hooey. Nothing more than pure GREED. We export more oil than ever. The refineries are up and running. No storms in the gulf. Nothing more than PURE GREED and PROFITS. PRICE GOUGING at its best.

OVER_LOAD

The day after the terrorist attacks on 9-11 didn't we call this price gouging?

kURTje

Fat Cats.

Contango

Re: "Prices then collapsed as the U.S. plunged into recession."

Not to worry. With the next recession, the price will come down.

http://www.gasbuddy.com/gb_retai...

Supply & demand: Rising prices means people are driving and there's economic activity.

Gardenman

I agree price gouging. They often talk about the refineries in the Chicago area and how this or that has affected the price based on the condition of those refineries. Two weeks ago I was in Minneapolis and the price of gas of 25 cents less per gallon. I asked a person in the know where is your gas coming from. They told me it was from Chicago refrineries. Same place as our but theirs was 25 cents less a gallon.

Pretty amazing right??? Not really as you see our area has Cedar Point and Minneapolis does not. As said its greed and price gouging here in this area.

I don't blame the local station personnel its the fat cats at BP, Shell, Marathon, etc who reap the greed. You should see some of the fine homes the Marathon execs have over in Findlay where corporate heads live. They are pretty elaborate in good old small town America town of Findlay.

For me I get some back as I have stock in Chevron and my or my that does pay well on dividends. At least I get some of their greed in my billfold.

Contango

Re: "BP, Shell, Marathon,"

Most of the majors sold off their stations and refineries yrs. ago due to low profit margins.

Oil production and refining: Two different industries.

Chevron (CVX) - 3.47% yield. Not bad.

http://data.cnbc.com/quotes/CVX

I own it indirectly in an energy sector fund (VGENX).

ladydye_5

I have Exxon Stock and it doesn't pay that well.

Contango

2.72% yield.

Still better than the current yield on a 10 yr. Treasury.

http://data.cnbc.com/quotes/XOM

I was recently in TX: $3.36 @ gal.

Who owns Big Oil? Chances are you do:

http://www.whoownsbigoil.org/

doglegright

I thought the prices being so high were because Obama is in bed with Big Oil. Oh wait, that is what the media screamed daily about prices during the Bush years....

Really are you ...

Enjoy the profit while they last.

Contango

Re: "Enjoy the profit while they last."

Gonna be awhile.

Because of new fracking technology, there are more estimated recoverable reserves world-wide than were previously extracted.

China has vast shale oil deposits and has yet to come on-line.

New Millennial millionaires are being created in TX.

http://en.wikipedia.org/wiki/Oil...

http://www.bloomberg.com/news/20...

ohioengineer

When I got my driver's license, gas was 39 cents a gallon. (Yep, I am old.) That means there has been a TEN times increase in the price of gas over my driving career. During this time we had 5 Republican and 5 Democratic presidents. So as much as we would like to blame the price increase on politics, both sides are equally guilty. Also during this same time there have been at least half a dozen Gulf Wars (I've lost count); a new Department of Energy; innumerable new rules formulated to "save energy"; and even more rules to "stop corruption" in the energy business. Of course, as the first sentence of my comment shows, nothing has worked.

So after 50 years and billions of tax dollars, it comes back to that same old principle we learned in high school economics: supply and demand. For the last half-century gasoline demand has outpaced supply, so the price has gone up and up. The good news is we should see this rule work in our favor as huge new oil fields in Canada and the US are developed in the coming years. Of course should these new sources of oil be stopped by more regulations, the supply will continue to fall and prices will continue to increase. You may not like it, but that is the way the world works.

The Big Dog's back

I hate to burst your bubble, but there is a glut of oil right now.

Really are you ...

Makes no sense. Can't blame a political party. Can't blame demand over supply. When was a gas station closed around here because their fuel pods were empty and waiting to be replenished? If oil goes to a world wide pool, and now the US is exporting more, China has a huge tar sand deposit, and Russia hasn't tapped Siberian oil reserves. What in the heck are we throwing our money at?