Drivers on the West Coast are currently experiencing a surge in the price at the pump due to the imbalance between supply and demand, and averages are up double-digits on the week in select markets.
ExxonMobil’s Torrance, Calif. refinery experienced a power outage and is reportedly delaying the restart of its gasoline production equipment. The refinery produces about 10 percent of California’s gasoline, has been operating at reduced capacity since February 2015, and this additional reduction in supply is contributing factor to prices moving higher in the region.
For the second consecutive week, California ($2.68) leads the nation with the highest average price for retail gasoline. Consumers in the Golden State are paying 13 cents per gallon more than second-place Hawaii ($2.55), and gas prices could move higher in the near term due to refinery issues. Nevada ($2.32), Washington ($2.24) and Alaska ($2.22) round out the top five most expensive markets. The nation’s least expensive market for retail gasoline is New Jersey ($1.73), which is also the only state with an average price below $1.75 per gallon.
Consumers in the vast majority of states (45) and Washington, D.C. are paying more at the pump versus one week ago. Retail averages in 19 states are up by a nickel or more per gallon week-over-week, and gas prices in Arizona (+19 cents), Nevada (+12 cents) and Florida (+11 cents) have climbed higher by more than a dime per gallon over this same period. Averages are down in five states on the week, but have fallen in a less dramatic fashion. Motorists in Missouri (-4 cents), Illinois (-3 cents), Minnesota (-2 cents), Ohio (-1 cents) and Indiana (fractions of a penny) are experiencing weekly savings at the pump, but prices have fallen by less than a nickel per gallon in each of these states.
With the exception of Hawaii (-4 cents) and Alaska (-4 cents), two of the nation’s most expensive markets, drivers nationwide have seen prices rise by more than a nickel per gallon compared to a month ago. Gas prices are up double-digits in 43 states and Washington, D.C. on the month, and consumers in 26 states have seen prices climb by a quarter per gallon or more over this same period. Drivers in the Midwestern states of Nebraska (+41 cents), Kentucky (+40 cents), Kansas (+38 cents) and Iowa (+38 cents) are experiencing the largest monthly increases in price due to a significant decline in regional production as local refineries either conduct maintenance or cut back on production due to low margins.
Consumers in every state and Washington, D.C. are benefiting from yearly savings at the pump of more than a quarter per gallon. Averages in 13 states are down 50 cents or more year-over-year, with the largest savings in states west of the Rockies: Alaska (-71 cents), Oregon (-67 cents), California (-60 cents) and Utah (-60 cents).
For the first time in 13 weeks, the U.S. oil rig count increased, which raises the possibility of continued strong production in the United States despite relatively low crude oil prices. Both Brent and West Texas Intermediate crude oil closed last week with gains, but each benchmark moved lower on Friday as oversupply concerns again come into focus. Global oil prices are expected to continue to move in response to ongoing discussions by some of the world’s top producers to potentially freeze production, which could be finalized at a meeting scheduled for April 17. The U.S. dollar is also in focus after posting its largest two-day loss in value since 2009. All eyes are on the Federal Reserve to see if corrective action is taken to help boost its value. A weaker dollar makes oil relatively less expensive for investors holding other currencies, which could help offset some of the market’s losses.
At the close of Friday’s formal trading session on the NYMEX, WTI was down 76 cents to settle at $39.44 per barrel.