Gas prices across the country are moving lower, but higher oil prices and tighter markets mean that trend could end.
The retail price for a gallon of gasoline, up 24 cents per gallon from last year, could eat into holiday spending for U.S. consumers, retail analysis finds.
The average retail price for a gallon of gasoline in the United States has been on a steady decline for most markets through October, following seasonal trends. The average price of $2.46 per gallon is more or less unchanged from last week, 12 cents per gallon less than one month ago, but 24 cents higher than on this date last year.
“Despite recent declines, the residual impact of last month’s hurricanes linger,” AAA spokesperson Jeanette Casselano said in a statement. “Drivers continue to pay in excess of 20 cents more for a gallon of gasoline than they did in 2016, which may prove challenging for those looking to put away some extra cash for the holidays.”
Wage growth in the United States has been relatively stable despite gains in overall employment. The U.S. Labor Department reported a median weekly wage of $859 during the third quarter, 3.9 percent higher than last year. Seasonally adjusted earnings of $868, however, were little changed from the previous quarter.
The U.S. energy market is still paying catch up from the series of hurricanes that moved through southern states and island territories in late August and September. Meanwhile, an increase in crude oil exports, which reached an all-time high, means there was less crude oil stored in the domestic market last week.
Regionally, AAA said the West Coast market, the most expensive in the Lower 48, is on pace to get costlier for consumers. U.S. supermajor Chevron reported a fire at a California refinery that produced 290,500 barrels of oil per day and the state is expected to increase a tax rate on gasoline from 29.7 cents per gallon to 41.7 cents per gallon starting Nov. 1. The average price for a gallon of gas in California was $3.03 on Tuesday.
In the Great Lakes region, the most volatile market in the country, many of the states there have the most expensive gas in the country. Gas prices in Michigan are up about 3 percent from last week to $2.57 per gallon, which AAA said was because gasoline inventories in the region are about 3.5 million barrels below where they were last year.
Patrick DeHaan, an analyst with GasBuddy, said the price at the pump paints a mixed picture. The national average has been below $3 per gallon for close to three years in part because of lower crude oil prices, which are still about half what they were in 2014. That trend, GasBuddy said, may be coming to an end.
“While the national average [price for gas] may drift slightly lower in the week ahead, higher oil prices may soon put a stop to the streak,” the report read.
The price for Brent crude oil, the global benchmark, is up 11 percent since the end of August, when Hurricane Harvey hit the southern Texas coast.