Wholesale Gasoline Spike Elevates Retail Prices Coast to Coast
Here's the latest national gas price update from Gasbuddy.com.
CHICAGO (Feb. 4, 2015) – In the past 24 hours, the national average price of gasoline has increased by 5 cents per gal. from $2.06 to $2.11… What’s going on?
Today’s jump has been brewing since Jan. 7. For the three weeks ending January wholesale fuel prices climbed 25 to 30 cents per gal., but that wasn’t as aggressive as what this week has already delivered. Since Monday morning wholesale gasoline prices are up an additional 11.5 cents per gallon, on average, nationwide. San Francisco saw the highest wholesale increase since Monday, up 24-cents per gal.
“What does it mean for retail prices? It’s an indication that the prices at the pump in most areas will be climbing steadily and in some other areas, like the Great Lakes region, we’ll see steeper climbs. For instance, Michigan’s average price on Tuesday was $2.09 and this morning it’s 2.23,” said Gregg Laskoski, senior petroleum analyst with GasBuddy.
Bay City, MI led all U.S. metro markets with a 29-cent increase just in the last 24 hours. (To see the U.S. metro markets with the highest price increases click here)
“It’s not uncommon for many to look at the headlines and assume that the jump in crude oil or the United Steel Workers strike (at 9 refineries) triggered the price increases, but they’re only peripheral issues,” Laskoski added. “Retail prices are rising as they always do in the first quarter for the same reasons year-in and year-out: Refinery outputs are reduced during a transition process necessitated by EPA mandates. A maintenance period begins between the time that winter fuel is depleted and before the cleaner-burning, more expensive ‘summer-blend’ gasoline production can begin. Much but not all of that maintenance is scheduled in advance.”
And as a result, we’re all seeing gas prices go up whether we’re in Philadelphia, Detroit, Seattle or anywhere in between.
“California and the Pacific Northwest now have the highest wholesale prices in the nation so some of the largest increases are expected in California…and that’s due largely to the head-start our refineries get on that annual maintenance,” added Allison Mac, a GasBuddy analyst based in Los Angeles. “While we saw West Texas Intermediate (WTI) jump to $54/bbl yesterday, it would be a mistake to think that’s a direct cause of what we’re seeing this week,” added Allison Mac, a GasBuddy analyst based in Los Angeles. “It’s coincidental but at the same time, we shouldn’t overlook it since crude oil and retail gasoline prices move in tandem the majority of the time.”