Today’s (Aug. 7, 2012) national average price for a gallon of regular self-serve gasoline is $3.63. This price is 13 cents more expensive than one week ago and 25 cents more expensive than one month ago. The national average today is 30 cents higher than the summer low of $3.33 on July 2 but is 31 cents below the year-to-date peak price of $3.94 on April 5. After falling for 75 of 77 days prior to the July low, the national average retail price has now increased for 33 of the last 36 days.
The increasing national average over the last month highlights the broad trend of higher pump prices due to rising global crude oil prices, much more expensive domestic ethanol as a result of the current Midwestern drought and an increase in demand due to the summer driving season. However, looking at prices for individual states during this period reveals that regional price trends have varied dramatically.
As headlines focused on the largest July increase for the national average retail gas price in more than a dozen years, drivers in Alaska, Hawaii and the Western U.S. have actually seen prices decline over the last month. This price relief has come as refining and distribution issues have been resolved. The onset of these issues had pressured prices in the region higher late this spring even as the national average retail price was falling. The downward pressure on regional prices from these issues being resolved has been enough to outweigh the upward pressure on prices that has sent the national average higher over the past month.
Motorists in the 41 states and the District of Columbia east of the Rocky Mountains, on the other hand, are acutely aware of rising pump prices over the past month. This increase has been most dramatic in the Midwest and Washington, D.C., where average prices have increased by at least 38 cents. These increases have significantly outpaced the rising national average, as refinery and distribution issues have put additional upward pressure on prices in the Great Lakes region, much as similar issues on the West Coast pressured prices higher there in May.
While the national average price has risen at a seasonally historic rate over the last month, motorists may have still felt some relief as pump prices have remained below year ago levels. For more than 100 consecutive days the national average has been below that of the same day in 2011. This year-over-year price relief widened to nearly 28 cents on July 16 before narrowing dramatically to less than four cents today. Based on current trends, it is reasonable to expect that this period of lower year-over-year prices may come to an end in the coming weeks.
While the national retail price for gasoline continued to rise, global oil prices remained relatively flat last week for the third consecutive week. After both domestic and international economic concerns pressured oil prices lower during the first four days of trading last week, prices reversed this decline on Friday and surged back above $90 per barrel on a positive U.S. jobs report and weaker dollar. At the close of yesterday’s formal trading on the NYMEX, the price for WTI crude oil had risen even further, increasing 80 cents to settle at $92.20 per barrel.
Courtesy: Marilyn Buskohl | Public Affairs, AAA SOUTH DAKOTA