As some of you may know, GasBuddy sent out gas price hike alerts yesterday to members in Michigan, Indiana, Ohio, Wisconsin, Kentucky, West Virginia, and Minnesota. For those who don't live in these states, you received no warning- and that's because prices spike in these states whereas they rise slower in other areas.
In the seven Midwest states I mentioned above the average price hike was 23 cents per gallon. The price most stations in those states will rise to is between $2.79-$2.85.
For those in the other 43 states- beware. While your prices won't spike as they did in those areas today, prices will definitely be on the increase for you as well. No state will be spared this time around as oil closes at its highest level since early May.
While there isn't much that has changed to fuel this recent rally, there are a few main ingredients that caught oil players off guard. First- the DOE showed in last weeks report that gasoline demand was quite high- in fact- the highest in some years. Implied demand was over 9.6 million barrels per day in the U.S., something we haven't seen since the summer of 2007.
Also, overall oil demand hit near 20 million barrels per day- something that only has happened one other time this year- Memorial Day week. That statistic caught people off guard as well.
And finally, the last ingredient- Tropical Storm Colin formed. While early models show this storm to move close to the East Coast and away from a majority of the oil infrastructure, its a reminder that this year projections show a higher than normal level of activity- so there's a higher risk of disruption.
While oil had been trading under $80 and couldn't muster the strength to break $80, it happened yesterday and there's no telling exactly what can happen now. The longer oil prices stay over $80, the larger the risk of continued gains.
For now, fill your tank sooner rather than later, and continue to stay with us- we'll keep you in the know.