Gas Prices Moving Higher Again

Prices not reflecting supply and demand fundamentals

Gasoline prices remain volatile this year, with the nationwide average of self-serve regular jumping nearly eight cents in the last week to $2.701 a gallon, according to AAA.

Prices are now back were they were a month ago, before going down in early February, mirroring the fluctuation in crude oil prices.

The average price of diesel fuel is $2.872 a gallon, up nearly five cents since last Friday.

Prices have risen, fallen and are now rising again despite the fact that little has changed in recent weeks in terms of supply and demand. The Energy Information Administration reports U.S. gasoline demand remains weak, at roughly 8.5 million barrels a day.

Refining activity is down as well as EIA data also indicates refineries are now running below 80 percent capacity for the first part of the year. US retail gasoline supplies currently have a healthy cushion of nearly 27 days worth of gasoline in stock. So why are prices going up?

"Oil prices have largely detached themselves from the traditional fundamentals of supply and demand," said Andrew Delmege, AAA's manager of regulatory affairs. "Oil demand, while forecasted to grow in developing nations during 2010, remains sluggish at best in the United States and is showing only marginal improvements in other major economies the world over."

Despite the relative volatility of oil prices in the first two months of 2010, retail gasoline prices have been able to stay within a 15 cent band - between about $2.61 and $2.76 for self serve regular - since the start of the year.

The 10 most expensive states to purchase gas today are: 1. Hawaii ($3.436) 2. Alaska ($3.338) 3. California ($2.969) 4. New York ($2.869) 5. Connecticut ($2.844) 6. District of Columbia ($2.799) 7. Oregon ($2.781) 8. North Dokota ($2.771) 9. Pennsylvania ($2.748) 10. Oregon ($2.748)

The 10 states where gas is the cheapest today are: 1. Missouri ($2.529) 2. Wyoming ($2.540) 3. Oklahoma ($2.554) 4. South Carolina ($2.557) 5. New Jersey ($2.557) 6. Texas ($2.568) 7. Colorado ($2.586) 8. Virginia ($2.597) 9. Arkansas ($2.598) 10. Kansas ($2.605)


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