The chart below shows the average retail prices of gasoline over the last 5 years during the first 5 months of the year. Apparently an increase in seasonal demand during this period generally causes retail gasoline prices to increase during the first part of the year, but this year there may be some additional factors including: 1) Increased prices of crude due to cold weather arriving late and OPEC production cuts, 2) Demand is running high relative to seasonal norms, 3) Refinery maintenance and some unplanned refinery refinery outages have reduced gasoline production in recent weeks and 4) Gasoline imports have declined due to a higher demand in Europe.
At 255.9 cents per gallon as of March 12, 2007 prices are now 19.3 cents per gallon higher than at this time last year. In California prices are now at 306.8 cents per gallon, 53.6 cents per gallon above last year’s price. How high will prices go this year?
Chart and comments adapted from This Week In Petroleum, March 14, 2007. See this reference for more detailed analysis.