AAA: U.S. retail gasoline market volatile

WASHINGTON, July 21 (UPI) — A stable national retail average price for a gallon of gasoline is masking volatility in some U.S. sectors brought on by refinery issues, motor club AAA said.

The national average price for a gallon of gasoline Tuesday was $2.75 per gallon, about seven tenths of a percent lower than last week and 1.4 percent, or four cents, lower than one month ago.

AAA said the general stability masks an otherwise volatile retail market that saw prices pulled higher in part by ongoing spikes in California. The state average price in California for Tuesday was $3.87 per gallon of regular unleaded.

“Drivers in California are paying the highest averages since August 2014, largely due to imbalances between gasoline supply and demand,” the motor club said in a weekly status report. “A lack of imports and the blending components used to make CARBOB, the state’s mandated specialty fuel, are also reported to be dwindling and retail averages are expected to remain high.”

In the Midwest, historically one of the more unpredictable markets for gasoline, prices are plummeting after a string of regional refinery outages resolve. Ohio’s state average price of $2.60 per gallon Tuesday was more than 5 percent below the price one month ago.

As a whole, however, the national average price is nearly 25 percent lower, or about 82 cents less per gallon, than one year ago and is the lowest for this date in nearly five years.

Gasoline prices are tied strongly to crude oil prices, which continue trading lower because markets are flooded with oil in part because of gains in U.S. shale basins. Last week’s nuclear deal with Iran means an eventual return of one of the largest producers from the Organization of Petroleum Exporting Countries.

“Although the timeline for the possible return and at what quantity remains in question, downward pressure is expected to remain on global oil prices as a result of the news,” AAA said.