Gas Prices Make Largest Weekly Increase of the Year

(WASHINGTON, March 7, 2016) The national average price jumped six cents on the week, the largest one week increase since the beginning of the year. Today’s average price is $1.81 per gallon, and the national average is likely to continue to move higher due to spring turnaround activity and reductions in supply in select regional markets. Drivers are paying six cents more per gallon to refuel their vehicles versus one month ago; however, significant yearly discounts remain and pump prices are down 65 cents on the year.

In advance of the busy summer driving season, refineries typically undergo scheduled maintenance during the first two quarters of the year. This year’s spring turnaround has been characterized by lower-than-expected prices, which has prompted a number of refineries to adjust their maintenance schedules and/or cut production in response to abundant supplies. Refineries are also reportedly beginning to reduce production in preparation for the seasonal switchover to summer-blend gasoline. Prices generally move during this time of year and the impact of this shift in schedule, combined with other seasonal factors, may cause prices to swing at the regional level at a faster rate than normal as supply and demand seek balance. The lower price of crude oil and abundant supplies should keep a ceiling on how high gas prices move in the coming months, and barring any unexpected disruptions in supply, drivers should continue to benefit from relative savings at the pump.

Pump prices are above the $2 per gallon benchmark in a total of five states, all located on the West Coast where averages tend to lead the market. Motorists in Hawaii ($2.54) are paying the nation’s highest averages for gasoline, followed by regional neighbors California ($2.45) Alaska ($2.16) Washington ($2.10) and Nevada ($2.04). A total of 20 states are posting gas prices at or below $1.75 per gallon, which is down by 11 states in comparison to last week’s report. Arizona ($1.55) and South Carolina ($1.55) are the nation’s least expensive markets for retail gasoline.

Gas prices generally moved higher on the week, largely due to the spring refinery maintenance season being underway in many parts of the country. Pump prices are up week-over-week in a total of 48 states and consumers in 28 states are paying a nickel or more per gallon to refuel their vehicles versus one week ago. Averages climbed higher by double-digits in eight states over this same period, with Michigan (+14 cents), Colorado (+12 cents), West Virginia (+11 cents) and Kansas (+11 cents) posting the largest weekly increases in price. Outside of this trend, drivers in three states are paying less on the week: Alaska (-5 cents), Hawaii (-3 cents) and Washington, D.C. (fractions of a penny).

Averages moved by double-digits on both ends of the spectrum month-over-month. Retail averages are up on the month in 26 states, with the biggest jumps in price occurring in the Midwestern states of Michigan (+34 cents), Minnesota (+34 cents), Ohio (+33 cents) and Indiana (+28 cents). Prices are down in 24 states and Washington, D.C. over this same period, with the largest savings at the pump experienced by drivers in Arizona (-22 cents), Alaska (-20 cents) and Nevada (-17 cents).

Year-over-year drivers nationwide are experiencing savings at the pump of more than a quarter per gallon. Pump prices are down by more than 50 cents per gallon in 44 states and Washington, D.C. in comparison to this same date last year. The largest yearly savings are seen in California (-98 cents), Arizona (-91 cents), Oregon (-90 cents) and Nevada (-83 cents), where prices are down by more than 75 cents per gallon at the pump over this same period. This time last year California was grappling with a major outage at an ExxonMobil refinery in Torrance, CA refinery, and prices were sent noticeably higher in the region due to supply shortages.

Both global oil benchmarks, Brent and WTI, closed out the week posting gains due to speculations that the lower price environment was beginning to take its toll on global oil production. Market fundamentals are starting to point toward supply and demand coming more into balance in the nearer-term, despite a considerable amount of skepticism remaining around the potential deal between Nigeria, Russia and other production countries to freeze output in an effort to help stabilize prices.

Reports of a strengthening U.S. economy and a falling U.S. rig count helped to boost the domestic benchmark. At the close of Friday’s formal trading session on the NYMEX, WTI was up $1.35 and settled at $35.92 per barrel. This represents WTI’s highest settlement in two months.

Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.

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