Oklahoma’s prices at the pump are the highest they’ve been all year, AAA says. The average price for a gallon of regular self-serve gasoline Tuesday stands at $2.375, up 59 cents since hitting a 2015 low of $1.79 on Jan. 19. Even so, Oklahoma has the third-lowest gas price average today of any of the states except South Carolina and Missouri.
“Rising pump prices are directly tied to the price of crude oil, which is more than $15 above the price in mid-March,” said Chuck Mai, spokesman for AAA Oklahoma. “But despite this upward trend in crude prices, AAA believes Oklahomans will continue to see pump prices significantly lower than last year, barring any major supply disruptions. Our state average is likely to remain below $2.70 per gallon throughout the year.”
The national average price of regular gasoline has moved higher for 20 consecutive days for a total of 24 cents per gallon. Today’s price of $2.63 represents the most expensive average price of the year. Motorists nationwide are paying eight cents more per gallon today than they did one week ago and 24 cents more than one month ago. The national average price one year ago was $3.67.
Fueling the higher national price average are unexpected refinery issues, which may force some state averages even higher over the next few weeks. However, AAA says it expects the national average to remain below $3 per gallon throughout 2015.
The three states with the lowest statewide averages for regular gas today are South Carolina ($2.34), Missouri ($2.35) and Oklahoma ($2.38). The West Coast continues to lead the nation in posting the highest prices for retail gasoline due to regional refinery issues that have caused prices to surge higher. California ($3.71) remains the nation’s most expensive market – $1.33 above Oklahoma’s average – and is joined by three other states with averages above $3 per gallon: Hawaii ($3.20), Nevada ($3.19) and Alaska ($3.11).
The price of crude rallied to close out April due to a slowdown in U.S. production, a weakening dollar and growing instability in the Middle East. U.S. oil supplies remain at record highs, but the growth in production has reportedly slowed in recent weeks, which could indicate a new balance in supply and demand. The market also is focused on the Strait of Hormuz – a narrow waterway off the Iranian coast that provides access to major oil-exporting ports in the region.
The U.S. is increasing its naval presence in the region after Iran unexpectedly seized a container ship attempting to pass through the strait. Historically this strait has often been at the center of tensions between the U.S. and Iran, and with the two countries also attempting to reach a nuclear agreement by June 30, both sides are carefully weighing options. This tension has put upward pressure on the global price of crude.
While WTI is at nearly a four month high, it is unclear whether oil prices will remain at this level. The number of active drilling rigs in the U.S. has reached its lowest level since October 2010, and U.S. oil storage remains at an all-time high. At the close of yesterday’s formal trading on the NYMEX, West Texas Intermediate closed down 22 cents to settle at $58.93 per barrel.