WEX Monthly PPG Average Report for January 2014
|Los Angeles, CA||$3.70||$4.09|
|New Orleans, LA||$3.11||$3.69|
|San Francisco, CA||$3.74||$4.29|
|St. Louis, MO||$3.08||$3.61|
|National Average (US)||$3.31||$3.88|
Gas Prices Hold Steady but a Bounce Could be on the Horizon
The national average is holding steady at $3.27 per gallon, nearly 25 cents below where it was last year. January fuel demand was reported to be more than 4-percent below where it was in 2013 due to the cold and snowy weather. This decrease in consumption has kept prices at bay.
Experts predict that prices are likely to dip a little further over the next few weeks followed by a spike that could exceed 50 cents per gallon into March. This is due to the annual switch to summer fuel spec. The EPA mandates that the fuel in summer must be a special formula for air quality purposes. This formula is harder to make and fewer refineries internationally have the ability to produce it, limiting supply.
Traders always fear that there will not be enough supply on hand to meet the increased demand in summer, which will drive prices higher. Market-watchers are forecasting a rebound in demand as the weather improves which will impact supplies.
Meanwhile, diesel prices have been shooting higher. The colder than normal winter has put a strain on natural gas and many utilities have switched to burning diesel. This has put a crimp in supply and pushed diesel prices higher. It is particularly difficult in the Northeast where many people are heating their homes with heating oil.