You may not have noticed because prices remain pretty low, but gas prices are inching up once again. When we asked Gasbuddy.com Senior Petroleum Analyst, Patrick DeHaan, he told us, “It definitely looks clearer to me that the national average hit a bottom on Monday.”
Prices are going up
The national average on Monday was $2.026 per gallon. On Friday, it’s $2.051 per gallon and rising. DeHaan said prices are moving upward at a relatively slow pace. He expects it will be six months to a year before we see prices as low as we did earlier this week.
Higher gas prices are most noticeable in states where drivers had been paying the lowest prices. That’s common, according to DeHaan, because those gas stations operate on the thinnest of margins.
Thursday to Friday biggest gas price jump
- IN – up 11.5 cents
- MI – up 6 cents
- IL – up 4 cents
- MO – up 2.5 cents
- WI / OK – up 2 cents
The reason prices are rising
There are a few reasons we may be seeing this rise, according to DeHaan. He said reports from the Energy Information Administration make it clear: oil inventories are going up, but gas coming out of refineries is going down. “This is economics 101. Classic supply and demand,” said DeHaan. Crude inventories increased this week by nine million barrels. At the same time, gasoline inventories decreased by two-and-a-half million barrels.
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“If you’d like to point fingers, it would be at the refineries that are only using 88% of capacity this week. One month ago, it was 92-95%,” DeHaan said. “Some of the slowdown in production may also be related to extremely cold weather. Cold temperatures can disrupt equipment exposed to the elements.”
DeHaan also said it’s about now when refineries start to take down some of their equipment for maintenance. “I’m not sure anyone can change the oil on their car while it’s running. That’s the equivalent of what the refineries have to do.” That slowdown in production impacts prices.
What’s next for gas prices?
DeHaan said to expect prices to continue to rise at a slow pace. The Great Lakes states will see prices spike and ebb with each spike being higher than the last one. The rest of the country will see a slow rise in prices.
Still, good news
Even with the lift in prices, DeHaan told us prices this summer will still be more affordable than last year. The nation may struggle to hit $3 a gallon, he said. That’s unless OPEC changes its mind and makes a decision to push for a rise in prices, DeHaan added.
“I would be almost shocked if gas prices hit $3 a gallon or more as a national average this summer,” said DeHaan. However, he concluded, there are always exceptions. These areas could see $3 per gallon, according to the Gasbuddy.com expert.
$3 per gallon possible this summer
- New York
- Washington D.C.
- Major cities such as Chicago, Miami and San Francisco
You can check gas prices in your area by going to gasbuddy.com.