After three straight weeks of declining pump prices, gas has become more expensive in several parts of the country as regional supply issues forced motorists to dig deeper to fill their tanks. The AAA Daily Fuel Gauge Report said the national average for regular gas was $2.21 on Thursday, up 2 cents from a week ago. Though the national average has changed little, several states experienced bigger increases, including some in the Great Lakes area.
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AAA said higher prices in that region were primarily due to scheduled seasonal maintenance at refineries and unexpected repairs that have reduced gasoline production and added to price volatility. An ExxonMobil refinery in Joliet, Ill., was the latest to report unplanned maintenance, AAA stated.
Patrick DeHaan, senior petroleum analyst for GasBuddy.com, said the higher pump prices in the Great Lakes states also are due to a phenomenon known as "price cycling," in which prices shoot up after a period of steady declines. Studies by the Federal Trade Commission and others say price cycling occurs most often in the Great Lakes area because a significant number of independent gasoline retailers there offer lower prices than the major brands.
As retailers compete for customers by cutting prices, they whittle down their profit margin to the wholesale price they pay for gasoline, or even lose money, in hopes customers will spend more on snacks, beverages and the other items they sell. Once one or two brands raise prices to try to make money again, competitors quickly follow suit, and pump prices can jump sharply in an urban area or region. After a week or so of higher prices, the cycle often begins again as retailers go back to cutting prices to lure customers from rival brands.
The statewide average for regular unleaded gas in Ohio jumped 6 cents a gallon the past week to $2.28, and motorists in the Youngstown area saw pump prices shoot up by an average of 11 cents. In Michigan, the statewide average rose 12 cents to $2.41, with cities in the central and northern sections seeing higher increases. Despite the recent price gyrations, analysts maintained their predictions that prices should fall over the next couple of months.
"Although refinery production rates are expected to return to normal in the next two months, unplanned outages could keep pump prices volatile in the region leading into the winter months, and possibly put a bit of upward pressure on the national average in the near term," AAA stated.
Spokesman Avery Ash said: "Gas prices likely will increase during the first half of November, but that trend might not last long. With any luck, we could still see average gas prices drop below $2 per gallon in more areas in time for Christmas."
DeHaan noted: "While we can't eliminate the possibility of relatively small price adjustments in the short term, I expect prices to generally be lower by the arrival of the holidays, and perhaps a dozen more states will see price averages drop under the $2 level by Christmas."
AAA reported that gas was already available for less than $2 a gallon at stations in 41 states. As of Thursday morning, the average price was below $2 in nine states. South Carolina had the cheapest gas at $1.91, followed by Alabama at $1.94, and Louisiana, Mississippi, New Jersey and Texas at $1.97. Average prices rose by 2 cents or more in each of those states the past week.
Hawaii had the most expensive gas with a statewide average of $2.88 a gallon for regular, followed by California at $2.84 and Nevada at $2.71. Premium gas averaged $2.69 nationally and diesel fuel averaged $2.39; both were unchanged from the previous week.
from Cars.com News http://ift.tt/1RBAz0Y
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