Public Affairs Specialist, OH
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CINCINNATI, Oh. – The national gas price average increased three-cents on the week to $2.91. All but seven states are paying more on the week. Today’s national gas price average is six-cents more than a month ago and 41-cents more than a year ago.
“The September switch-over to winter-blend gasoline ushered in cheaper gas prices compared to the summer, but that drop was short lived,” said Jenifer Moore, AAA spokesperson. “Crude oil accounts for half of the retail pump price and crude is selling at some of the highest price points in four years. That means fall and year-end prices are going to be unseasonably expensive.”
Crude oil has priced higher amid concerns of global crude supply and geopolitical tensions, including pending sanctions with Iran and Venezuela’s unstable economy.
As a result, fall gas prices have not been this expensive since 2014. At that time, motorists were paying on average more than $3/gal and crude oil was selling well above $70/bbl. This year, despite stocks increasing in the U.S. by 8 million bbl on the week, crude oil is selling at a good $25/bbl or more than last year, hitting $75/bbl last week.
Drivers in the Buckeye State had the largest weekly gas price increase according to AAA’s Gas Price Report. Pump prices in Ohio increased nine cents from $2.73 on the week.
Kentucky and Indiana landed in the second and fifth spots on the list with an increase of eight cents ($2.82) and seven cents ($2.92), respectively on the week.
Overall, gas prices are more expensive for every state in the Great Lakes and Central region except Wisconsin ($2.89) where prices saw no change on the week. Regional refinery maintenance and expensive crude oil prices are two major factors contributing to the increase.
Compared to September, motorists are paying 5-13 cents more to fill-up in the region. Gasoline inventories dipped by 661,000 bbl, according to Energy Information Administration (EIA) data, dropping total inventories to 51.5 million bbl. Levels sit at one of the lowest for the region this year, but are comparable to this time last year. If inventories continue to decline, prices will likely continue to increase.
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI increased a penny to settle at $74.34. Crude prices bounced between gains and losses last week due to concerns around the impact of U.S.-imposed sanctions on Iran, which will go into effect early next month and target Iran’s energy sector. The volatility is also attributed to concerns about the possible collapse of Venezuela’s economy. The increase in crude prices occurred despite crude oil inventories increasing by 8 million bbl to 404 million bbl last week, according to EIA. As speculation ramps up before the new sanctions on Iran take effect — which is driving increased investment in crude under the allure of even higher prices being reached later this year — crude prices will likely continue climbing next week.
In related news, Baker Hughes, Inc. reported that the U.S. lost two oil rigs last week, bringing the total to 861. However, when compared to last year at this time, there are 113 more rigs now than in 2017.
AAA offers these tips to motorists to save at the pump:
AAA provides automotive, travel and insurance services to 59 million members nationwide and more than three million members in Ohio. AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years. AAA is a non-stock, non-profit corporation working on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel and track their roadside assistance service with the AAA Mobile app for iPhone, iPad and Android. For more information, visit www.AAA.com.
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