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Kentucky’s average gas prices jump 20 cents over past week, experience largest price increase in nation

As gas prices rose in many areas across the country last week, Kentucky led the nation with the largest week-over-week rise in average gas price, jumping 20 cents.

However, at $2.53, the current average in Kentucky for unleaded is still well below the $2.77 motorists were paying in Kentucky last year at this time. Despite the recent jump, Kentucky still has about the 17th cheapest average gas price in the nation.

Lexington’s average gas price jumped 25 cents, rising from $2.28 a week ago to $2.53 today.

Last week was the first time since early June that the national gas price average jumped more than a nickel in just a few days. On the week, it’s over a dime more expensive at $2.67, with half of states seeing prices increase by 10 cents or more. However, even with the significant increase, the national average is still cheaper compared to last month (-7 cents) and last year (-18 cents).

Retail responds to higher crude prices

Spurred by the attacks on Saudi Arabian oil facilities the weekend prior, crude oil (West Texas Intermediate – WTI) increased as much as $10 a barrel at its highest point early last week, to nearly $64 a barrel. Gasoline stations reacted just as swiftly as the crude market, raising local retail prices by as much as a quarter, which pushed the national average up six cents overnight last Tuesday.

However, by the end of last week, crude was down to $58 a barrel and gas prices started to stabilize as reports surfaced that Saudi facilities should be fully operational by end of September.

“At $2.67, the national average is more than a dime higher than last week. The good news is we are seeing downward movement with crude oil prices and stabilization at gas pumps. But, Americans can expect some fluctuation through the end of the month,” said Lori Weaver Hawkins, the public and government affairs manager at AAA Blue Grass. “Should Saudi’s crude production be back to full capacity soon, the price spikes are likely to be temporary.”

In its latest report, the Energy Information Administration (EIA) measured U.S. demand at 8.9 million barrels a day, which is a substantial 900,000 barrel a day drop from the previous week and a low reading not seen since February. The decrease in demand amid the spike in crude oil prices could help to keep gas price fluctuations more moderate through the end of the month.

Quick stats across the nation

•The nation’s top 10 least expensive markets are: Mississippi ($2.32), Louisiana ($2.32), Arkansas ($2.34), Alabama ($2.34), South Carolina ($2.36), Oklahoma ($2.37), Virginia ($2.38), Texas ($2.39), Tennessee ($2.40) and Missouri ($2.40).

•The nation’s top 10 largest weekly increases are: Kentucky (+20 cents), Michigan (+17 cents), Georgia (+16 cents), Minnesota (+16 cents), Iowa (+15 cents), Maryland (+14 cents), Delaware (+14 cents), New Mexico (+14 cents), Mississippi (+13 cents) and South Carolina (+13 cents).

Central U.S. showed highest price volatility

Pump prices in the Great Lakes and Central states saw the highest volatility of any region following the drone attacks on Saudi Arabian oil facilities.

Motorists in some states are paying nearly 20 cents more to fill-up as compared to last Monday. Kentucky (+20 cents), Michigan (+17 cents), Minnesota (+16 cents) and Iowa (+15 cents) saw the largest weekly increase in the region and land among the top 10 states in the country with the biggest jumps in pump prices. Most states in the region are paying more than they were a month ago, with the exception of South Dakota (-2 cents), Michigan (-1 cent) and Wisconsin (no change).

State averages range between $2.82 – $2.40, with three states touting an average at $2.70 or above: Illinois ($2.82), Michigan ($2.73) and Ohio ($2.71).

Gasoline stocks drew by 539 million barrels for the week ending Sept. 13, EIA’s latest report. That drops total stocks down by 52.5 million barrels, which is among the highest decreases seen in the region since April. Down 4 percent to 96 percent, regional refinery production could slow in coming weeks as refineries plan for fall maintenance. A drop in stocks amid more expensive crude oil prices would likely mean an increase in pump prices for motorists in Kentucky and the rest of the central region.

Oil market dynamics

At the close of Friday’s formal trading session on the NYMEX, WTI decreased by 4 cents to settle at $58.09. Oil prices increased sharply last week, following news of attacks on two crude oil facilities in Saudi Arabia on Sept. 14. On Sept. 16, the first full day of trading after the attack, WTI crude oil prices experienced the largest single day price increase since Aug. 21, 2008, and June 29, 2012, respectively, according to EIA.

On Tuesday, Saudi Aramco reported that it was producing 2 million barrels a day and that its entire output capacity will be fully restored by the end of September. Additionally, Saudi Aramco stated that crude oil exports to customers would continue by drawing on existing inventories and offering additional crude oil production from other fields.

Tanker loading estimates from third-party data sources indicate that loadings at two Saudi Arabian export facilities were restored to the pre-attack levels – based on analysis by EIA. These efforts have helped crude prices to stabilize, and they are expected to continue stabilizing this week.

In related news last week, EIA reported that total domestic crude inventories increased by 1.1 million barrels last week. They currently sit at 417.1 million barrels, which is 23 million barrels higher than where they were last year at this time.

Motorists can use AAA Mobile app for current gas prices
Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.

From AAA Blue Grass

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