U.S. gasoline prices most likely hit their spring 2014 peak on April 29 at $3.658 gal and many states are likely to see pump prices ease to where motorists pay a bit less than what they paid last Memorial Day weekend, according to GasBuddy analysts.
Analysts for the consumer app and website observe that many of the factors that contributed to a 35cts gal spike in 2014 prices have run their collective course. All U.S. distribution terminals have now transitioned from “winter” to “summer” grades of gasoline, and about 90% of all U.S. spring refinery maintenance has been successfully concluded. U.S. refiners are now processing more than 1-million barrels per day of additional crude when compared to the same time last year, so gasoline production is on solid footing.
The GasBuddy forecast comes in the wake of an expensive April which saw U.S. consumers spend about $37.2- billion on motor fuel, up from the March 2014 number of $36.3-billion, and some $11.7 billion above what was paid in April 2013. GasBuddy analysts warn that motor fuel prices are still subject to “event risk” in the form of power outages, storms, and geopolitical disruptions. And GasBuddy analysts stress that the U.S. is more vulnerable to hurricane-inspired price swings, thanks to the confluence of refining equipment at the U.S. Gulf Coast, and because of export commitments that many refiners now have with Central and South American countries.
The largest decreases in gasoline prices between now and Memorial Day may come in California. Wholesale prices for gasoline in the Golden State are now 30-33cts gal lower than levels seen just three weeks ago, and some demand destruction has been observed. Prices in the Great Plains and Great Lakes could also see a slow drift lower, and southeastern states could ease closer to $3.25 gal or less. The tightest market for fuel may be the northeastern U.S., thanks to a decline in import availability.
In 2013, the average U.S. pump price for Memorial Day weekend was $3.63-$3.64 gal, which is almost identical to where prices are in the first few days of May 2014. GasBuddy believes that Americans will be paying 3-10cts gal less when Memorial Day arrives three weeks from now.