U.S. pump prices rise to year high after crude oil rebounds
Retail gasoline prices rose to the highest level since 2014 in the Lundberg Survey as crude oil rebounded from a six-year low in March.
The average price of regular gasoline in the U.S. rose 13.18 cents to $2.5798 a gallon in the two weeks ended April 24, according to Lundberg Survey Inc., based on information obtained at about 2,500 filling stations by the Camarillo, California- based company. Prices are $1.11 lower than a year ago.
Prices jumped to the highest level since Lundberg’s December 5, 2014, survey after an almost $14-a-barrel rally in U.S. oil futures. Pump prices may rise by a few more pennies per gallon, according to Trilby Lundberg, the president of the Lundberg Survey.
“The rise is mostly due to higher crude oil prices and a smaller factor — the continued transition to higher-cost summer blend gasoline,” Lundberg said in a telephone interview on Sunday.
The highest price for gasoline in the lower 48 states among the markets surveyed was in Los Angeles, at $3.30 a gallon, Lundberg said. The lowest price was in Tucson, Arizona, where customers paid an average $2.20 a gallon. Regular gasoline averaged $2.70 a gallon on Long Island, New York.
Refinery outages and the rebound in crude futures will probably continue to boost prices in the short-term to as high as $2.75 a gallon nationally and $3 in major cities, Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago, said by phone.
Refiners including BP Plc and Exxon Mobil Corp. are performing maintenance and repairs at U.S. plants this month. Exxon’s 150,000-barrel-a-day Torrance complex near Los Angeles was forced to cut production after an explosion at a unit in February.
West Texas Intermediate crude futures rose 11 percent to $57.15 a barrel in the two weeks ended April 24. Prices have surged 32 percent since hitting a six-year low on March 17.
“The odds of $2 gasoline are disappearing as the cost of crude continues to rise,” Michael Green, an AAA spokesman in Washington, said by phone. “We’re talking about an unexpected surge, and it has made predictions for the summer more difficult than ever.”
The U.S. Energy Information Administration projected on April 7 that retail gasoline prices would average $2.45 during the peak driving season.
“It’s going to be higher, but it’s still $1 less than it was last year,” EIA Administrator Adam Sieminski said Thursday.
Relief at the pumps is expected to save the average U.S. household about $700 this year compared to 2014, he said. Prices averaged $3.64 a gallon last April, AAA data show.
Gasoline futures on the Nymex jumped 11 percent to $2.0079 a gallon in the two weeks through April 24. Motor gasoline inventories in the U.S. fell by 2.14 million barrels in the week ended April 17 to 225.7 million, led by steep draws in the Gulf and West Coasts, EIA data show.
“Your big cities like Chicago, Los Angeles and San Francisco — obviously they are going to see $3 gasoline, if they aren’t already,” Flynn said. “So the bad news is, yes, gasoline prices are up. The good news is they’re still cheaper than they were a year ago.”
With assistance from Dan Murtaugh in Houston.