Fuel costs within the U.S. are steadily rising once more, leaving prospects of a $3 nationwide common within the rearview mirror. As of Feb. 15, the nationwide common gasoline value stood at $3.28 per gallon, up $0.12 from every week in the past, in line with AAA information.
A shutdown on the massive refinery in Indiana that usually processes 435,000 barrels of crude per day has impacted costs within the Midwest and pushed up the nationwide common.
Increased oil costs and up to date drawdowns in gasoline stockpiles have additionally put upward stress on gasoline prices for drivers throughout the U.S.
Whereas the nationwide common remains to be about $0.14 decrease than a 12 months in the past, some states have have seen outsized upward actions lately. Costs on the pump jumped a mean of $0.19 or extra over the previous week in New Mexico, West Virginia, Colorado, Maryland, Virginia, and Illinois.
The markets with the costliest gasoline embrace Hawaii at $4.70 per gallon adopted by California at $4.65 per gallon.
“We are in that time of year where pump prices begin to heat up, usually peaking around July,” AAA spokesperson Andrew Gross stated lately.
“But unless something shocks the global oil market and causes prices to spike, the national average for a gallon of gas will probably stagger higher, with some flat days or even small price dips along the way.”
The gasoline nationwide common had been in a downward development from its September 2023 peak of $3.88 per gallon. A few month in the past, the typical pump value hovered close to a one-year low of $3.07. The final time the nationwide common gasoline value fell under $3 was in Could 2021.
Learn extra: The most effective cash-back bank card for gasoline stations for February 2024
What determines the value of gasoline?
Greater than half of the value shoppers pay on the pump comes from crude oil, in line with the Power Info Administration (EIA).
Oil demand and the manufacturing targets set by the biggest oil producers, together with the Group of Petroleum Exporting International locations (OPEC) and its allies (OPEC+), play an necessary function in gasoline value fluctuations.
Fuel costs have climbed larger as crude oil costs surged in latest weeks.
Crude oil futures for West Texas Intermediate (CL=F) closed above $78 per barrel on Feb 15. Brent (BZ=F) , the worldwide benchmark value, surpassed $82 per barrel. These strikes partly replicate easing considerations of oversupply after the EIA lowered its U.S. manufacturing forecast for 2024.
Geopolitical dangers have additionally put upward stress on costs. Ongoing assaults towards vessels within the Crimson Sea by the Houthis, an Iran-backed insurgent group, have develop into a wild card for oil costs in 2024. The assaults by Houthi rebels have prompted power and cargo firms to keep away from the Crimson Sea area that connects to the Suez Canal, a essential pathway between Asia and Europe.
Tensions within the Center East have solely escalated over the previous month because the U.S. and UK carried out retaliatory strikes towards Houthi-controlled areas in Yemen, Israel rejected a Hamas ceasefire proposal, and the U.S. killed the commander of an Iran-backed militia following a lethal assault on an American navy base.
On the identical time, crude oil costs aren’t the one issue driving gasoline costs. Seasonality, refining capability, and distribution additionally affect costs.
In January, gasoline inventories surged to the best degree in a 12 months, in line with the EIA, however have since come down as demand for gasoline elevated. February snowstorms and chilly climate in the course of the seasonally gradual winter season, nevertheless, may nonetheless influence driving habits within the coming weeks.
State and federal gasoline taxes additionally contribute to the general price of filling up. In California, the state with the best gasoline tax, taxes add as much as $0.51 of the general value per gallon, whereas drivers in Alaska pay simply $0.09 per gallon.
Moreover, gasoline costs act as a barometer for the way shoppers really feel concerning the financial system, issue into elections, and contribute to the bigger inflation story that prompted the Federal Reserve’s newest rate of interest hike marketing campaign.
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