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AAA: Lower gas prices this summer, more driving

The Columbian
Published: June 2, 2015, 12:00am

Gasoline prices in Vancouver are unchanged for the week at $3.05 for a gallon of regular unleaded, the auto club AAA Oregon/Idaho reported Tuesday.

Prices for Oregon and Portland also held steady for the week, at $3.04 per gallon. Washington’s average price was up by one penny to $3.06.

For the 14th week in a row, California has the most expensive gasoline in the country at $3.68 a gallon, a drop of eight cents for the week. Washington’s price was the nation’s fifth-highest and Oregon landed in sixth place in the AAA survey. The national average for regular unleaded is $2.75.

Price, difference from year ago

National $2.746 -0.92

State price, difference from national average, difference from year ago

California 3.695 +0.95 -0.43

Florida 2.655 -0.09 -0.95

Georgia 2.680 -0.07 -0.91

Idaho 2.889 +0.14 -0.72

Illinois 2.948 +0.20 -0.96

Kansas 2.506 -0.24 -0.98

Kentucky 2.689 -0.05 -1.10

Mississippi 2.444 -0.30 -0.97

Missouri 2.483 -0.26 -0.96

North Carolina 2.611 -0.13 -1.00

Pennsylvania 2.837 -0.09 -0.92

South Carolina 2.443 -0.30 -1.00

Texas 2.507 -0.24 -0.96

Washington 3.057 +0.31 -0.86


NOTE: Numbers do not add up precisely because of rounding.

Source: AAA Motor Club, calculated by McClatchy

WASHINGTON – Despite recent increases, Americans are likely to pay the lowest summertime gas prices since 2009, when the nation was engulfed in financial crisis.

Gasoline prices in Vancouver are unchanged for the week at $3.05 for a gallon of regular unleaded, the auto club AAA Oregon/Idaho reported Tuesday.

Prices for Oregon and Portland also held steady for the week, at $3.04 per gallon. Washington's average price was up by one penny to $3.06.

For the 14th week in a row, California has the most expensive gasoline in the country at $3.68 a gallon, a drop of eight cents for the week. Washington's price was the nation's fifth-highest and Oregon landed in sixth place in the AAA survey. The national average for regular unleaded is $2.75.

It’s a welcome note, notwithstanding the fact that gas prices since January rose at one of the fastest clips on record.

“Oil prices jumped much higher than the market predicted, and refinery problems have been much worse than usual, especially on the West Coast,” said Michael Green, a spokesman for the AAA Motor Club.

In a report, AAA said that U.S. average gasoline prices of $2.75 a gallon on June 1 were up 71 cents per gallon nationwide since late January. But as of June 1, the national average was still down 92 cents from a year ago.

A McClatchy review of AAA’s state-level data found that drivers in all states are paying less than they did a year ago, and motorists in Southeastern states substantially less than they paid in June 2014.

Drivers in North Carolina, South Carolina and Kentucky are paying a dollar or more less per gallon than a year ago. In states as diverse as Texas, Florida and Missouri, the price of gasoline is 95 cents or greater below last June.

The exception to steep savings is California, still hit by gasoline production woes after February’s explosion at ExxonMobil’s Los Angeles-area refinery. The reduced output has meant that routine maintenance and a flaring event at other state refineries have effectively piled on to a bad situation to drive up prices further.

Californians are paying 43 cents below what they paid on June 1, 2014. But they paid the highest price in the nation, $1.25 more per gallon on June 1, than did drivers in Mississippi and South Carolina, the lowest-priced states.

When looking at the midpoint price for gasoline across the nation, that number is $2.66 a gallon. It suggests that California pulled up the national average.

AAA predicts that as refiners around the nation complete their maintenance switchover to produce summer-fuel grades, prices will begin to drop as motorists hit the summer driving season. The post-switchover drop in June over the past five years has averaged 12 cents a gallon, and AAA expects much the same later this month.

“That is sort of a reasonable expectation going forward,” said Green. “We see the market going under similar trends . gasoline supplies, which are already quite high, are likely to grow even more abundant.”

The Energy Information Administration, the statistical arm of the Energy Department, estimated that the week leading up to Memorial Day saw the highest demand for gasoline since August 2007. It suggests lower fuel prices are enticing Americans to take road trips, something AAA’s own surveys suggest to be the case as long as pump prices remain low by historical standards.

“In many years high demand would send gas prices much higher, but with supplies as abundant as they are today we may not see a significant increase in prices due to higher demand,” said Green, pointing to signs of cheaper fuel prices this summer. “There should be more than enough supply to meet demand this summer.”

Price, difference from year ago

National $2.746 -0.92

State price, difference from national average, difference from year ago

California 3.695 +0.95 -0.43

Florida 2.655 -0.09 -0.95

Georgia 2.680 -0.07 -0.91

Idaho 2.889 +0.14 -0.72

Illinois 2.948 +0.20 -0.96

Kansas 2.506 -0.24 -0.98

Kentucky 2.689 -0.05 -1.10

Mississippi 2.444 -0.30 -0.97

Missouri 2.483 -0.26 -0.96

North Carolina 2.611 -0.13 -1.00

Pennsylvania 2.837 -0.09 -0.92

South Carolina 2.443 -0.30 -1.00

Texas 2.507 -0.24 -0.96

Washington 3.057 +0.31 -0.86


NOTE: Numbers do not add up precisely because of rounding.

Source: AAA Motor Club, calculated by McClatchy

That’s not a universally held view.

“I think there is going to be one more price spike before summer is over,” said Phil Flynn, a veteran energy analyst for the Price Futures Group in Chicago, who thinks more driving by American motorists will also put upward pressure on prices. “We are seeing signs that prices after Memorial Day are not going to back off as much as anticipated.”

Pointing to new ethanol fuel mandates that may limit production of gasoline and the potential for further unrest in the Middle East, Flynn thinks there are reasons why financial markets think crude oil prices may go higher, pulling up gasoline prices.

“The market is realizing that the drop in U.S. (oil-drilling) rig counts and the cutbacks in capital spending on energy mean lower production going forward,” said Flynn, arguing for higher prices ahead. “The market is sure acting like it’s going to” go up.

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