Regional Oil Prices Driving Up Gasoline Costs in Different Parts of U.S.
WASHINGTON - AAA said that areas in the center of the U.S. that use gasoline from refineries with access to less expensive crude oil are seeing prices hold steady or even drop. But areas with more expensive crude prices are seeing gas prices rise.
WASHINGTON – The new weekly report from AAA on gasoline and oil prices shows the average national gas price is up from a week ago, at 3 cents higher. Overall, the average gas price is up 12 cents when compared with January and 38 cents when compared with February 2011.
Due to low demand for gasoline, refiners, and those processing more expensive crude oil products, are reducing production, which is pushing prices upward. According to last Wednesday’s weekly Department of Energy report, gasoline demand for the four weeks prior averaged 18.116 million barrels per day, which AAA said is the lowest level since April 25, 1997.
Oil prices moved upward, with West Texas Intermediate reaching $100.90 per barrel, largely due to geopolitical factors, including the austerity deal in Greece and tensions with Iran. AAA said oil price movement, including early last week, pointed out the price difference between WTI and Brent crude, the European oil benchmark, which has recently widened again. In 2011, the spread was as high as $30 (in September, 2011) but recently widened to more than $18 as of Feb. 13.
What effect is this price spread having on regional gasoline prices in the U.S.? AAA said that areas in the center of the U.S. that use gasoline from refineries with access to less expensive crude oil are seeing prices hold steady or even drop. Areas that use gasoline from refiners that buy more expensive crude are seeing prices go up. States such as Ohio and Michigan saw prices fall by 18 and 17 cents (respectively) when compared with January, but Connecticut and North Carolina have seen prices go up by those same amounts (also respectively). The current national retail average price for a gallon of self-serve regular gasoline is $3.51, AAA stated.
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