By Selina Stoller, Summit Consumer Receivables Acquisitions, LLC ***
After a prolonged period where gasoline prices stayed at relatively low levels, prices are escalating as Spring approaches.
Gas prices are starting to surge across the country averaging $3 a gallon with the national average now up 30 cents a gallon from its 2019 low.
The average price for regular gas mid-March was $2.547 a gallon and is now at $2.745. The lowest average so far in 2019 was $2.241 on January 7.
Among the states that have seen the biggest climb from their year-to-date lows are Michigan, up 63 cents; Illinois, up 56 cents; and Florida, up 54 cents a gallon.
“The Great Lakes dominate the list because of excess stockpiles of winter gasoline,” according to Patrick DeHaan, head of petroleum analysis at GasBuddy.
“Refiners discounted that fuel to entice demand temporarily. Now with it gone from the system, the discounts are gone and more expensive gasoline is hitting prices. The deeper those discounts go on a yearly basis, the more of a pinch motorists get once that gasoline is gone.”
The spring price surge is larger than expected.
Oil prices are generally the culprit when gas prices rise – but not necessarily during this price increase phase. Crude has only increased modestly from $57.26 a barrel to $58.87 at the end of March. By many measures, America is now the largest oil producer in the world – a distinction the country has not had for a year.
Refinery outages, due to seasonal maintenance, have contributed to tighter supplies. Venezuela has been a fairly significant exporter to the U.S. and the current situation might force U.S. refiners to find another crude source to replace lost Venezuelan volumes.
Overall for the year, GasBuddy’s 2019 fuel-price forecast called for average prices of $2.58 in March, $2.79 in March, and $2.97 in May. Price peaks are likely to occur mid to late April and Memorial Day.
- 23 Apr, 2019
- Josh Smith