Regional Oil Costs are Increasing the Price of Fuel
AAA’s weekly report on fuel costs shows that the national average gas price is up 3 cents from last week. To date, the national average for fuel costs has increased by 12 cents when compared to January, and an astonishing 38 cents compared to February of 2011.
The low demand for gas has refiners and processors of crude oil reducing their production, which increases the price. According to the Department of Energy’s weekly report, the demand for gasoline for the past four weeks has averaged around 18 million barrels each day, which is the lowest level since April 25, 1997 according to AAA.
Across the nation oil prices are climbing which is largely due to geopolitical influences, such as the severity in Greece and increased tensions in Iran. The movement in oil prices, according to AAA, shows the difference between WTI and Brent, the benchmark oil in Europe, which has widened recently. Last year, the spread between the two reached $30, but was marked at $18 as of February 13th, 2012.
So, how does this price spread affect regional fuel prices in the United States? AAA states that areas in the middle of the U.S. utilizing refineries that purchase cheaper crude oils are observing steady prices or even price drops. On the other hand, areas that use refineries whom purchase more expensive crude oils are seeing a rise in prices.
States such as Michigan and Ohio enjoyed a price drop of 18 cents compared to January, but other states such as North Carolina and Connecticut have seen a price increase by the same amounts. At the time of this writing, the national average cost for a gallon of regular gas is marked at $3.698 according to AAA’s fuel gauge report.
Visit Safety Track’s Fuel Management page for tips on how to control your fuel expense.