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Tampa, FL – The New Year began with increased gas prices reaching today’s average of $2.34 per gallon. The national average has moved higher for 34 of the past 35 days, largely due to market reactions to last fall’s OPEC deal. Pump prices increased by five cents on the week, by 18 cents per gallon on the month, and are up by 34 cents on the year.
Moving into 2017, retail prices will continue to hinge on the ability of cartel countries to successfully implement production cuts, but retail averages are likely to increase leading up to the summer driving season as seasonal refinery maintenance gets underway this spring.
Gas prices on the West Coast continue to be some of the highest in the country, with almost every state in the region landing on the top ten list of most expensive markets: Hawaii ($3.01), California ($2.76), Alaska ($2.68), Washington ($2.67), Oregon ($2.48) and Nevada ($2.43).
According to the latest EIA report, refiners in the region increased gasoline production to reach a two month high of 1.63 million b/d. Production levels in the region could slow down this month as PBF Energy is expected to begin planned maintenance on several major units at its 157,000-b/d Torrance, California refinery in mid-January.
Pump prices in the Rocky Mountain states continued to follow the national average upward over the past week. The busy travel holiday and rising cost of oil attributed to increases although averages remain below the $2.50 per gallon benchmark. Arizona ($2.12), Utah ($2.18), Wyoming ($2.19) and Colorado ($2.20) all landed on the list of top-15 cheapest markets in the country.
Mid-Atlantic and Northeast
Retail averages in the region continued to climb higher throughout the busy holiday travel weekend. Washington, D.C. ($2.59), Pennsylvania ($2.57), New York ($2.52) and Connecticut ($2.47) all rank in the nation’s top 10 most expensive markets.
In West Virginia, the state gas tax drops to 32.20 cents per gallon and in New York the rate drops to 41.84 cents per gallon.
Great Lakes and Central States
Gasoline inventories in the region dropped nearly 1 million bbl last week according to the latest EIA report. The decline can likely be attributed to lingering refinery issues, and as a result, drivers in some parts of the region are paying some of the nation’s highest averages at the pump.
Three of the nation’s top 15 most expensive markets are located in the Great Lakes region: Illinois ($2.49), Michigan ($2.42) and Indiana ($2.40). Meanwhile, drivers in Missouri (+9 cents), South Dakota (+8 cents) and Minnesota (+7 cents) have seen prices jump seven cents or more per gallon on the week. Additionally, the largest monthly increases in gas prices are seen in Wisconsin (+29 cents), Illinois (+28 cents), Minnesota (+27 cents), Iowa (+27 cents), Missouri (+25 cents), Nebraska (+25 cents) and Indiana (+23 cents).
Drivers in Michigan (+7.3 cents) and Nebraska (+1.5 cents) will experience higher gas taxes for the new year. Ohio (-7 cents) was the only state in the country to see weekly declines.
South and Southeast
The Southern region remains home to some of the nation’s least expensive markets for retail gasoline: South Carolina ($2.10), Alabama ($2.13), Tennessee ($2.13), Mississippi ($2.14), Texas ($2.14), Arkansas ($2.15) and Louisiana ($2.15).
The region saw some temporary inventory declines last week due to exports and a power outage at CITGO’s Corpus Christi, Texas, refinery that resulted in flaring and excess emissions, according to OPIS. Florida (+9 cents), Arkansas (+8 cents), Texas (+7 cents) and Mississippi (+7 cents) all make the top 10 list for largest weekly increases. Drivers in Georgia (+0.3 cents) also saw gas taxes increases at the start of the new year.
Global Market Dynamics
Both crude oil benchmarks closed out the year posting the largest annual gains since 2009, with Brent gaining 52 percent and West Texas Intermediate gaining 45 percent to close the year. These gains can largely be attributed to the OPEC agreement, a deal brokered by OPEC and non-OPEC countries to cut crude oil production by 1.8 million barrels per day in an effort to rebalance the global oil supply.
Additionally, as 2016 came to a close, U.S. gasoline production reached a record high of 10.537 million bbl for the last week in December. Typically, domestic demand falls in January so higher gasoline production may lead to a stock build in the coming weeks and could have a bearish market impact on gasoline. In 2017, traders will continue to monitor whether participating countries adhere to the OPEC agreement and the rate at which U.S. gasoline production increases.
At the close of formal trading session on December 30th on the NYMEX, WTI closed out the year down five cents to settle at $53.72 per barrel.
Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance.
Learn more at AAA.com/mobile
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