Gasoline prices get early start on spring surge
Gasoline prices are starting their upward spring march a little earlier this year, although at a slower pace in Utah.
The average retail price nationally is up 13 cents in the past two weeks, to $3.42 per gallon, and within a few days it is expected to set a record for this time of year.
The culprits are rising crude oil prices, slowing output at refineries that are undergoing maintenance, and lower supplies of gasoline.
In Utah, the average is 33 cents below the U.S. price, and the state remains in the lower tier of states after sporting some the lowest prices all winter, said Rolanye Fairclough, with the travel services company AAA Utah.
"We have seen some rather dramatic increases, 15 cents from last week," she said. "But in other states, prices have risen by 40 cents and 50 cents. Hopefully, we can still maintain lower prices in Utah. Right now [they] are in the typical place for us to be this time of year."
Generally, gasoline prices nationally don't start their surge until spring after what is normally a lull in increases in the late fall and early winter. But a heavy schedule of January maintenance at West Coast refineries has led to sharply higher prices there. Low inventories have pushed prices higher on the East Coast.
And rising crude oil prices have pushed prices higher throughout the country.
"I'm not surprised at what I'm seeing, but I am surprised it's coming early," said Tom Kloza, Chief Oil Analyst at the Oil Price Information Service.
Hopes of stronger economic growth in the U.S. and abroad helped push the U.S. stock market to a five-year high in January and sent crude prices up. When economies expand, more gasoline, diesel and jet fuel are consumed by shippers and travelers.
Crude oil has risen 14 percent since mid-December, to $97.49 on Thursday. Brent crude, the benchmark used to price oil that most U.S. refineries use to make gasoline, is up 9 percent since then, to $115.55
But gasoline wholesale prices are rising even faster. That's the price distributors and service stations pay to buy the gasoline that they then sell to drivers. Wholesale prices in California are up 56 cents a 20 percent jump to $3.32 per gallon, in just two weeks, according to Kloza. Many California drivers will soon see $4 a gallon at local stations. Smaller but still substantial jumps are being seen throughout the country.
Retail gasoline prices have risen for 14 days straight, according to AAA. The average price for the month of January was $3.32, the second-highest January average ever, although a nickel cheaper than last year's record. In each of the past two years gasoline prices rose sharply at the beginning of the year because tensions in the Middle East raised fears that oil supplies would be disrupted. In 2011, it was the Libyan uprising; in 2012 it was Iran's threat to close a key shipping lane.
So far in 2013, gas has been cheaper than it was last year. But that could change by this weekend as stations pass along the cost of their higher-priced gasoline to drivers.
The national average price has risen in nine of the last 10 Februarys. Last year, gasoline prices jumped 28 cents, or 8 percent, in February and averaged $3.55 for the month.
Analysts still don't expect prices to follow last year's steep path through March that brought them to a high of $3.94 on April 6. Crude oil supplies are high, oil production is booming and the economy isn't growing very fast. Also, the tensions in the Middle East seem to have eased somewhat.
And consider this as you fill up on your way to a Super Bowl party this weekend. Oil and gas analyst Stephen Schork notes that although gasoline prices may seem high, they haven't risen nearly as fast as tickets to the big game. When the first Super Bowl was played 46 years ago, gasoline cost about 32 cents per gallon and Super Bowl tickets cost $10. Today, gasoline is $3.42 and a seat in a distant corner of the Superdome costs $2,236 on the ticket-reselling site StubHub.
Put another way, a ticket to the Super Bowl in 1966 was worth about 31 gallons of gasoline then, enough for 2 fill-ups. A ticket to Sunday's game between the Baltimore Ravens and San Francisco 49ers in New Orleans is worth 650 gallons enough to fill a midsized sedan 43 times.
Which makes gasoline, according to Schork, "a bargain."
Tribune reporter Dawn House contributed to this story
Gas prices in Utah
Thursday • $3.09
Week ago • $2.94
Month ago • $3
Year ago • $3.08
Record high • $4.22 (July 18, 2008)
Thursday • $3.42
Week ago • $3.32
Month ago • $3.29
Year ago • $3.45
Record high • $4.11 ( July 17, 2008)
Find low-priced gasoline
O Go to UtahGasPrices.com or SaltLakeGasPrices.com