Gas prices keep climbing as OPEC's self-imposed production cuts inch closer.
With the Christmas and New Year holidays approaching, gasoline prices continue their month-long climb, leaving motorists paying significantly more than they did just a year ago, according to the latest weekly survey from AAA.
The national average price for regular unleaded gasoline sits at $2.25 per gallon, which is the highest mark since October. The average across the U.S is four cents more per gallon than one week ago, nine cents more compared to one month ago and 24 cents more than the same period last year, AAA reported.
Prices continue to rise due to market expectations of tighter availability following the announcement of an OPEC deal to cut oil production that is scheduled to start in January, according to AAA analysts.
“Last week, markets continued to react to the OPEC production agreement as Saudi Arabia and Russia made clear their intentions to fully cooperate with the production cut. OPEC and non-OPEC members agreed this month to cut oil production collectively by 1.8 million barrels per day in an effort to rebalance the global oil market,” AAA noted.
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The increase in global prices has led to a small increase in drilling activity in the U.S., which serves to moderate the overall increase.
In reaction to the OPEC agreement, U.S. interest in oil production has increased and drillers added 12 new oil rigs in the last week, bringing the total oil-rig count to 510 rigs nationwide, according to Baker Hughes Inc., the AAA report added.
AAA also noted traders will continue to watch how OPEC and non-OPEC members move forward with the terms of the agreement and how U.S. oil producers react. At the close of Friday’s formal trading session on the NYMEX, WTI was up $1 to settle at $51.90 per barrel.
Meanwhile, drivers on the West Coast continue to pay some of the highest prices in the nation, including Hawaii where prices continue to inch up toward the $3 per gallon benchmark.
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Despite these high prices, drivers in many of these same states are enjoying some of the most dramatic month-over-month declines in the country. The price of a gallon of gasoline has fallen by 18 cents per gallon in Idaho and dropped by 8 cents per gallon in Nevada and by a nickel in Oregon, Arizona and Washington. The price of gasoline has also come down by four cents per gallon, on average, in California during the past month.
According to recent reports from the U.S. EIA, gasoline production on the West Coast reached a one month high of nearly 1.6 million barrels per day and gasoline inventories remain at a 15-week high
With the exception of Florida where gasoline in going for $2.30 per gallon, Southern states continue to dominate the list of markets with the least expensive gasoline.
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Arkansas and Oklahoma at $2.02 per gallon are the nation’s cheapest markets for retail gasoline and they are followed by South Carolina, Mississippi, Texas, Alabama, Tennessee and Louisiana where gasoline is currently selling for $2.07 cents per gallon, AAA reported.