Jan. 23 (UPI) — Abnormal trends for U.S. retail gasoline prices so far could point to higher prices for the year, but there may be short-term relief in store, analysts said.
Motor club AAA reports a national average retail price of $2.54 per gallon for Tuesday, a slight increase from the previous day and about 10 cents per gallon, or 4 percent, higher than one month ago.
Jeanette Casselano, a spokeswoman for AAA, said gas prices usually drop by as much as 20 cents during the first few weeks of January as holiday demand sloughs off, but this year the trend is reversed.
“For consumers, the question is how high are gas prices going to go in 2018,” she said in a statement.
Crude oil prices, a major factor in the price at the pump, continue to flirt with four-year highs because of lower production from members of the Organization of Petroleum Exporting Countries and expectations of economically-driven demand pressure. The U.S. Bureau of Economic Analysis releases its estimate of fourth quarter gross domestic product on Friday.
On Monday, the International Monetary Fund said global economic growth has been strengthening at least since 2016, but warned of complacency because of lop-sided growth and cyclical momentum.
By market, the West Coast in the United States continues to be the most expensive in the country, with California taking the top mark with $3.19 per gallon, though that’s skewed slight by a new fuels tax that went into effect last year. Nearby Washington, however, is close behind with $2.94 per gallon.
Gas prices in the region or more or less stable and could move lower. The inventory for gasoline in the market is at a four-year high, federal data show.
The Great Lakes market, meanwhile, is the most volatile, with Indiana and Michigan both posting declines in retail gasoline prices from last week of more than 10 cents. Compared with this time last year, however, those same states are paying 30 cents or more for a gallon of gas and are at the top of the list for yearly increases.
Patrick DeHaan, a petroleum analyst at GasBuddy, said the region is vulnerable to a few refineries and a phenomenon he calls “price cycling,” a situation where retail stations drop their prices to compete, but are forced to drive them up again to make money.
“Great Lakes refinery issues continue to flare up with no warning and gas prices there may continue to be more volatile in coming weeks,” he said in a statement.
He said last week that there may be some relief in sight for gas prices as a while as refineries start making a summer blend of gasoline and sell off their winter stocks at a bargain, but that relief might last only through the middle of February.
Federal data show the average retail price for a gallon of regular unleaded gasoline was $2.42 last year and should be about 15 cents per gallon higher for all of 2018.