Gas prices jumped four cents in the last week, driven by a combination of rising US exports and crude oil prices that reached a three-year high of more than $66 a barrel.
The average for a gallon of unleaded settled at roughly $2.58 on Monday, with motorists in all but three states finding prices higher at the pump than a week ago. AAA spokesperson Jeanette Casselano said consumer demand is 'noticeably higher' than expected for late January, especially given the cold weather that's hit much of the country. But that's only part of the story.
"Crude oil has been selling at very expensive rates the past few months," Castellano said. "Those higher market prices are now trickling over to consumers at the pump.”
Another factor: declining crude inventories in the US. The most report from the Energy Information Administration showed a decrease of 1.1 million barrels from the previous week, putting supplies at their lowest level in three years and 77 million barrels below January 2017 levels.
Patrick DeHaan, chief petroleum analyst at GasBuddy, said that even with US crude production rising to some 9.7 million barrels a day -- closing in on the record 10.044 million barrels a day reported in November 1970 -- the traditional winter relief at the pump is unlikely this year.
"Without gas prices falling, the current price environment may be the floor for what could become a more expensive year than anticipated, barring any change to OPEC policy that has led to today’s climate of lower supply and higher prices,” he said.
Drivers in the Great Lakes, Midwest and South saw the highest per-gallon increases in the last week. At 8 cents, North Dakota saw the nation's biggest increase, followed by Nebraska and Iowa at 7 cents. Alaska, Utah and Iowa were the only states that saw prices drop from the previous week.
GasBuddy has predicted that Americans will spend more than $25 billion this year on gasoline this year -- an increase of $133 per household. That estimate may turn out to be on the low side, said GasBuddy's chief Canada analyst Dan McTeague.
"By all measures early in this new year, that number may well be exceeded," he said. "Don’t expect oil prices to drop anytime soon."
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