High gas prices not yet crimping demand

High gas prices not yet crimping demand
UPI

April 24 (UPI) — Higher retail gasoline prices in the United States aren’t doing much yet to crimp demand, which is testing multi-year highs, a market reports find.

Motor club AAA reported a national average retail price of $2.77 for a gallon of regular unleaded gasoline on Tuesday, up just a fraction from the previous day but about 6 percent, or 17 cents per gallon, more expensive than one month ago.

Higher oil prices and stronger demand figures are leading to spikes in gasoline prices. Consumer data from the federal government last week show demand in April is already higher than during a typical summer travel season. Nationwide, 13 percent of the retail stations have prices above the $3 per gallon mark.

“Pump prices are causing sticker shock across the country,” AAA spokeswoman Jeanette Casselano said in a statement.

By region, the West Coast has the most expensive gas in the country, with all but Arizona showing an average price above $3 per gallon. Arizona, however, was also among the states with the highest weekly increases, at 6 cents per gallon from last week.

While higher than last year’s level by about 400,000 barrels, federal data show regional gasoline inventories drained at their highest level in five weeks.

In terms of spikes, the Great Lakes states are seeing prices climb considerably. Both Michigan and Ohio posted 10 cent jumps in the price for gas for last week and Michigan leads the pack with a 35 cent per gallon increase from last year. In the Lower 48, Michigan is No. 10 in the nation with a state average of $2.87 per gallon.

Inventory levels in the region dropped 800,000 barrels last week.

Looking ahead, Patrick DeHaan, the senior petroleum analyst at GasBuddy, said prices could climb steadily ahead of the long Memorial Day holiday at the end of May given recent demand indications.

“The road ahead at the pump looks quite ominous if that demand number proves common in the coming weeks,” he said.

Gas prices may be approaching the point that consumers could change habits. AAA suggested last week that travelers may have to start saving money to help pay for any summer road trips.

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