Gas prices rise for most Americans, here's why
Gasoline prices have spiked for most of the U.S. — and especially the Midwest — during a period in which motorists are usually experiencing relief at the pump.
Amid rising oil prices and ongoing refinery maintenance due to the lingering effects of Hurricane Harvey, fuel prices have jumped over the last week in 43 states and the District of Columbia, according to consumer-information service GasBuddy.
The average national price of $2.52 per gallon on Friday morning was up 30 cents from a year ago and up 5 cents from a week ago, according to AAA.
A 12-cent gas tax increase in California that took effect Wednesday is contributing to the spike.
But the pain at the pump is particularly sharp in the Great Lakes states after the Explorer Pipeline, which carries gasoline from the Gulf Coast to the Upper Midwest, was forced to operate on reduced capacity in late October.
Explorer said it had completed repairs on the pipeline and returned to pumping at normal levels Wednesday. But the Midwest is still reeling from tight gasoline supplies that have driven up prices, partially caused by local refinery maintenance that was delayed after Harvey ravaged the Houston region.
"It may get a little worse in the Great Lakes before it gets better," GasBuddy petroleum analyst Patrick DeHaan said.
Average retail prices in Illinois, Indiana, Michigan and Ohio on Friday morning were $2.76, $2.75, $2.72 and $2.65, respectively, according to the Oil Price Information Service.
Those figures were up 58 cents, 67 cents, 60 cents and 59 cents from a year earlier.
Those markets "became absolutely unmoored," OPIS analyst Tom Kloza said.
Another factor driving up prices: high demand for gasoline. With the economy strong, Americans are hitting the road. Gasoline inventories fell by 4 million barrels this week to 212.8 million, much faster than analysts were expecting, according to research firm Capital Economics.
Also, oil prices have edged upward in recent weeks, briefly topping $55 per barrel Thursday for the first time since last winter. Traders are anticipating a potential extension of production cuts by the Organization of the Petroleum Exporting Countries.
Still, Kloza predicted that gas prices would ease in the coming weeks, per usual trends this time of year, when drivers are less likely to hit the road because of less daylight and worse weather.
"I would dress up as a clown suit on Christmas if prices are higher by then," Kloza said. "I don’t have one in my closet, by the way."