WASHINGTON -- Following last year's volatility, 2013 has started with relative price stability at the pump, according to AAA's Jan. 22 Fuel Gauge Report. In the first 22 days of the year, the national average has yet to record a daily price change of a penny or more per gallon. By comparison, daily prices in December changed by at least that much 15 times.
Last January, the daily average moved by a penny or more nine times, including two increases of more than three cents per gallon, which were two of the six largest daily price changes of the year. The largest one-day change in the national average in 2012 was on August 29 when prices surged by nearly five cents per gallon the day after Hurricane Isaac made landfall on the Gulf Coast.
The Jan. 22 national average price for a gallon of regular unleaded gasoline is $3.31. This price is a penny more expensive than one week ago and six cents more than one month ago, but it remains seven cents less than the average price one year ago.
The annual average price of gasoline in 2012 was an all-time record at $3.60 per gallon, exceeding the previous high of $3.51 per gallon in 2011; however, despite record pump prices, 2012 was not the most expensive year for motorists, as demand destruction due to a still weak U.S. economy and increases in fuel economy offset the higher price per gallon.
In 2012, the average household consumed some 1,140 gallons of gasoline for an annual average cost of $4,112. This was just slightly below the record $4,127 that an average household spent in 2011, when it consumed approximately 1,174 gallons of gasoline.
AAA continues to expect that the national average price in 2013 will be less expensive than the record average in 2012, and analysts continue to predict that demand destruction is likely to persist even with a recovering economy.
The national average has remained stable to begin the year; however this average has obscured price volatility in some regions. The price at the pump has fallen in 30 states and Washington, D.C. over the last week, but prices increased in 20 states, primarily in the Central and Southwest United States, in some cases dramatically. The increase has been most significant in Nebraska, Michigan and Minnesota, where prices have surged more than 10 cents in the last week.
Much of this rise is a reversal of falling prices in these same states from mid-December to mid-January, even as prices in the majority of the country were rising. Additionally, the price of crude oil products in the mid-continent has climbed recently, outpacing the increases for global crude. While this oil has been landlocked and trading at a discount to global products, speculation is that additional pipeline capacity allowing more of this crude to get to the coast, where it can be sold on the more competitive global market. This has recently put upward pressure on oil prices in the Central United States and ultimately on the price that motorists in the region pay at the pump.
West Texas Intermediate (WTI) crude oil prices have continued to move higher to begin the year and are now at their highest level since mid-September. At close of formal trading on the NYMEX on Jan. 23, the price of WTI settled 68 cents higher, at $96.24 per barrel. This is the highest settlement price since Sept. 17.