Gas prices pump higher as the cost of oil rises: AAA
With the price of crude oil spiking last week, the national average price for a gallon of gas increased by nine cents to $3.64 per gallon for the week ending April 13, according to the latest AAA gas prices report. The West Texas Intermediate (WTI), an oil market benchmark, increased by $1.73 to settle at $83.26 at the close of Wednesday’s formal trading session, AAA reported.
"When the cost of crude oil crosses the $80 a barrel mark, that puts a lot of upward pressure on what we pay at the pump," AAA spokesperson Andrew Gross said in a statement. "And as long as oil costs remain at the current level, drivers will likely see incremental price increases for now."
The current national average cost of gas is $3.64, 17 cents more than a month ago but 44 cents less than a year ago, AAA reported. The national average gas price has increased daily since March 29.
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Gas prices across the U.S.
Although the national average cost of gas rose by nine cents, some states saw larger overall increases. Here are the 10 states that saw the largest spikes in average gas prices.
- Arizona (+18 cents)
- North Dakota (+17 cents)
- South Dakota (+17 cents)
- Nebraska (+16 cents)
- Indiana (+16 cents)
- Kansas (+15 cents)
- New Mexico (+15 cents)
- Iowa (+14 cents)
- Illinois (+14 cents)
- Oklahoma (+14 cents)
And these states were the top 10 most expensive gas markets.
- California ($4.89)
- Hawaii ($4.78)
- Arizona ($4.52)
- Washington ($4.43)
- Nevada ($4.25)
- Illinois ($4.06)
- Oregon ($4.01)
- Alaska ($3.86)
- Pennsylvania ($3.74)
- Indiana ($3.72)
Looking forward, gas prices could keep rising for the time being if oil prices keep increasing, even in light of lower demand for gas, AAA said.
Gas demand decreased from 9.3 to 8.94 million barrels a day last week, according to new data from the Energy Information Administration (EIA). At the same time, total domestic gasoline stocks dropped slightly by 400,000 barrels of crude oil to 222.2 million.
"Lower demand would typically push pump prices down; instead, elevated oil prices have pushed them higher," AAA said in its report. "If oil prices continue to rise, pump prices will follow suit."
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Gas prices were lower year-over-year
Despite this week’s spike in gas prices, the cost of gasoline decreased by 17.4% year-over-year in March, according to the latest gas index data published by the Bureau of Labor Statistics (BLS). The gasoline index decreased 4.6% month-over-month in March after a 1.0% increase in February, the BLS reported.
But even though gas prices are not near their 2022 highs of around $5 a gallon, many consumers still have dealt with high inflation. In fact, inflation increased by 5% year-over-year in March, as measured by the Consumer Price Index (CPI).
Although this marked inflation’s smallest 12-month increase since the period ending May 2021, many Americans have felt the weight of high prices on their wallets, reports have shown. To put that into perspective, 73% of Americans said they are stressed about inflation, according to a Clever Real Estate study published this month. And 74% of workers globally said inflation is their biggest stressor, a Fidelity Investments report found.
"Headline inflation cooled in March, but it's not time to celebrate just yet," Morning Consult's Chief Economist John Leer said in a statement.
To reduce inflation, the Federal Reserve has increased interest rates several times throughout last year and into 2023. In its last meeting, the Fed increased interest rates by 25 basis points despite banking industry pressure.
"Tight credit conditions after bank failures and high interest rates are expected to slow down spending and result in further cooling down of prices in the coming months, Dawit Kebede, Credit Union National Association (CUNA) senior economist said.
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