- The nation’s top five most expensive markets are: California ($2.83), Hawaii ($2.71), Alaska ($2.65), Washington ($2.62), and Michigan ($2.60).
- The nation’s top five least expensive markets are: South Carolina ($2.10), Mississippi ($2.11), Arkansas ($2.13), Oklahoma ($2.13) and Texas ($2.15).
- The national average moved higher for 25 of the past 26 days, for a total increase of 25 cents per gallon.
- Today’s average is the lowest for this time of year since 2005.
A number of refineries in California are reporting challenges, including the newly restarted ExxonMobil Torrance, Calif. plant and Chevron’s El Segundo, Calif. refinery. Reduced gasoline production in the state has historically led to price spikes based on the region’s relative isolation from other markets and its unique fuel specifications, but ample supply in the region is appearing keep prices relatively steady on the week (+/- 3 cents).
States in the region continue to post some of the nation’s highest averages at the pump: California ($2.83), Hawaii ($2.71), Alaska ($2.65) and Washington ($2.62). Nevertheless, the region is doing much better than a year ago with prices at least 50 cents per gallon cheaper: California (-79 cents), Nevada (-76 cents), Alaska (-73 cents), Hawaii (-60 cents), Arizona (-56 cents) and Oregon (-53 cents).
Fuel supplies have declined in the Midwest over the past month due to lingering refinery issues, and as a result, drivers in the region are paying some of the nation’s highest averages at the pump. Four of the nation’s top 10 most expensive markets are located in the region: Michigan ($2.60), Ohio ($2.60), Illinois ($2.53) and Indiana ($2.51). Meanwhile, drivers in Ohio (+12 cents), Michigan (+9 cents), Kentucky (+9 cents) and Indiana (+7 cents) have seen prices jump more than a nickel per gallon on the week. Additionally, the largest monthly increases in gas prices are seen in Ohio (+41 cents), Michigan (+38 cents) and Indiana (+33 cents), and drivers in every Midwestern state are paying at least a dime more per gallon over this same period.
Refineries in the Midwest have recently increased production to the highest rates since March, though output continues to lag behind last year’s levels. There is hope that the region might soon experience price relief if production continues to increase.
On the whole, the Gulf Coast remains home to some of the nation’s lowest averages for retail gasoline. Three of the nation’s five least-expensive markets are located in the region: Mississippi ($2.11), Arkansas ($2.13) and Texas ($2.15). Unplanned refinery maintenance and severe weather are reportedly impacting pump prices in the region and prices moved higher on the week by a nickel or more in Texas (+6 cents) and Louisiana (+5 cents).
Pump prices in the region could fluctuate in the near term due to flooding in Texas, which prompted the closure Magellan Midstream Partner’s pipeline. This pipeline transports products from Gulf Coast refineries to distribution terminals located both in Texas and outside of the region, and is expected to be out of service for approximately two weeks. Supply in the region could be impacted due to its closure, and Magellan is reportedly looking for alternative supply options.
Oil Market Dynamics
Crude oil prices opened the week moving higher as geopolitical tensions in Nigeria threaten to disrupt the country’s production. The lower-than-expected U.S. job growth rate also contributed to expectations that the Fed would refrain from increasing its interest rate. This decision could weaken the U.S. dollar, which typically leads to higher oil prices. At the close of Friday’s formal trading session on the NYMEX, WTI closed down 55 cents to settle at $48.62 per barrel.