Why Higher Gas Prices Should be Short-Lived

The average price across the United States for a gallon of regular gasoline last week jumped 6.8 cents to $2.12, as of Monday morning. Diesel fuel prices fell to an average of $2.11 a gallon last week, falling below the average price for gasoline for the first time this year. That condition is likely to last for the rest of this year, according to analysts at GasBuddy.

Week over week, prices increased the most in Kentucky (up 15 cents) with prices rising 14 cents in Minnesota and Illinois. Nine states saw prices increases of more than 10 cents per gallon.

Some 14 states continue to report average prices below $2 a gallon, with about 40% of all U.S. gas stations still selling gasoline at under $2 a gallon.

The cheapest gas in the country is available in Louisiana ($1.882 per gallon), Mississippi ($1.8886), Oklahoma ($1.886) South Carolina ($1.888) and Texas ($1.898).
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GasBuddy senior petroleum analyst Patrick DeHaan said:

Gasoline prices increased last week in 49 of 50 states, thanks to a sudden jump in the price of crude oil tied to speculation of a change or freeze in oil output at this weekend’s meeting in Doha, Qatar. At the conclusion of the talks over the weekend, no decision was made – not at all a surprise given the recent disagreements between major players Saudi Arabia and Iran. The lack of a clear vision to cut or even freeze crude oil production will likely lead to a sharp sell off in oil markets to start the week as global oil production continues to outpace demand. While typically we’re used to seeing gasoline prices racing higher in the spring, the direct impact of this weekend’s meeting could cause gasoline prices this week to reverse temporarily as oil markets react.

The states with the highest pump prices are: California ($2.785 per gallon), Hawaii ($2.632), Nevada ($2.457), Washington ($2.316) and Pennsylvania ($2.294). Note the difference of nearly 50 cents a gallon between California and Pennsylvania prices.

Crude oil for May delivery traded down more than 4% Monday morning to $38.82, after closing at $40.36 on Friday.

The most common price for regular gasoline currently is $1.999 a gallon, unchanged over the past three weeks, and about 99% of U.S. gas stations are selling gas for more than $1.75 a gallon, up about four percentage points from a week ago.