US Gas Prices on the Rise after 123-Day Decline

The average price of gasoline in the U.S. increased during the past week, rising by more than 10 cents per gallon, according to a new survey by AAA, reported The Detroit Bureau.

Gas prices had declined for a record 123 consecutive days to $2.03 per gallon before increasing last week for the first time since Sept. 25.

Many drivers are noticing an uptick in gas prices for the first time in months,” said Avery Ash, AAA spokesman. “It is typical to see gas prices increase this time of year due to refinery issues, yet hopefully the consumer impact will be less problematic given how low prices are today.”

The refinery issues were exacerbated last week by a strike by the United Steel Workers at nine major refineries in Texas, California and Louisiana. Refiners said they planned to operate the highly automated plants with management and contract personnel.

In addition, the price of crude oil increased by 7% on concerns about continuing threats to oil production in the Middle East and North Africa where a civil war in Libya has reduced oil production.

However, the national average price of gas is $2.06 per gallon, which is about $1.22 per gallon less than a year ago. AAA estimates that Americans are spending about $365 million less per day on gasoline compared to this time last year.

Overall, consumers are continuing to benefit from the drop in oil prices.

The price of gasoline has dropped about $1.64 per gallon since reaching a national average of $3.70 per gallon on April 28, 2014.The average price of gas in January was $2.11 per gallon, which was the cheapest monthly average since April 2009. Gas prices in December 2014 averaged a much higher $2.51 per gallon, while the average was $3.30 per gallon in January 2014.

Domestic crude oil prices have fallen by more than half since June due to abundant supplies. U.S. oil production has increased by more than 70% since 2008, and this increase in production has helped to outstrip global demand, especially as economic concerns mount in both Asia and Europe.

Overall, AAA now expects gas prices to increase this month due to refinery maintenance and decreased production. It is not uncommon for gas prices to increase 30-50 cents per gallon between early February and the middle of spring. Gas prices in February have increased during the previous five years by an average of 22 cents per gallon.

“It is a good bet that most drivers will pay more for gasoline in March than today,” Ash said. “Yet even if gas prices increase as expected, drivers should continue paying at least a dollar less on gasoline than what they spent in recent years during the spring.”

But gas prices should remain less expensive than in recent years due to lower crude oil costs. AAA does not expect the national average price of gas to rise above $3 per gallon in 2015, he said.