Regional Oil Prices are Increasing Fuel Costs
The weekly fuel report from AAA shows a 3 cent increase in fuel prices from last week. Overall, the average fuel cost across the nation has increased by $0.12 compared to last month, and a whopping 38 cents compared to February, 2011.
Decreased demand for gas has refiners of crude oil lowering their production, which has increased the price they charge. According to the Department of Energy’s latest weekly report, consumer demand for gasoline for the past four weeks has averaged roughly 18 million barrels a day, the lowest level since April 25, 1997.
National oil costs have increased, with a major factor being geopolitical influences, such as recent events in Greece and heightened tensions in Iran. According to AAA, the movement in oil prices shows the difference between Brent and WTI, the benchmark crude oils in Europe, has widened. In 2011, the spread between the two peaked at $30, but was placed at $18 as of February 13th, 2012.
So, how does this price spread affect regional fuel costs in the U.S.? AAA states that cities in the middle of the U.S. using refineries that obtain cheaper crude oils are observing no price changes or even price drops. While areas that utilize refineries that purchase more expensive crude oils are observing price rises.
Michigan and Ohio have noted a price decrease of 18 cents compared to last month, however states such as North Carolina and Connecticut have seen fuel costs increase by the same amount. According to the fuel gauge report from AAA, the current national average is $3.698 for a gallon of regular gas.
Visit The Valor System’s Fuel Management page for advice on controlling fuel costs.