AAA: Continued Tight Oil Supply Will Keep Gas Prices Creeping Higher

NATIONAL REPORT — There is likely no end in sight for higher gas prices, despite lower demand during winter months.

As of Jan. 24, the national average for a regular gallon of gas was $3.33, 2 cents more than a week ago and 94 cents higher compared to the same period one year ago, AAA reported. The culprit is the rising price for oil, which is now slightly higher than $85 per barrel, nearly $20 more than in November.

Despite increased oil prices, Organization of the Petroleum Exporting Countries (OPEC) and its allies are maintaining their planned modest production increases and will not dramatically ramp up output.

"Since dipping to $3.28 in the first week of January, the national average for a gallon of gas has slowly started to rise again," said Andrew Gross, AAA spokesperson. "And as long as the price for oil remains elevated, consumers will be feeling it at the pump."

The top 10 largest gas price increases during the past week were found in Kansas (+9 cents), Michigan (+8 cents), Texas (+7 cents), Missouri (+7 cents), North Dakota (+7 cents), South Dakota (+6 cents), Oklahoma (+6 cents), Iowa (+6 cents), Nebraska (+5 cents), and Arkansas (+4 cents).

California is the most expensive state to purchase gas in the country, where the average price of a regular gallon of gas has reached $4.64. Following the Golden State is Hawaii ($4.34), Washington ($3.96), Oregon ($3.92), Nevada ($3.80), Alaska ($3.76), Arizona ($3.56), Washington, D.C. ($3.55), Idaho ($3.53) and Pennsylvania ($3.52).

According to data from the Energy Information Administration, total domestic gasoline stocks rose by 5.9 million barrels to 246.6 million barrels last week. Meanwhile, gasoline demand rose slightly from 7.91 million barrels per day to 8.22 million barrels per day. The slight increase still puts gas demand in the average range for the winter driving season, AAA noted. Typically, pump prices drop due to low gas demand and a rise in supply in the winter, but a steady increase in the price of crude oil has prevented this from happening.