Increased economic activity pushing up gas prices

LEXINGTON, Ky. (WTVQ) — While states are just beginning to reopen, the announcements are already being reflected in gas prices, which edged up a few cents in the past week in Kentucky and several other states.

The Commonwealth saw the average for a gallon of regular unleaded increase by 6 cents to $1.49. While Kentucky’s price at the pump is still the seventh cheapest in the nation, the jump in prices also the seventh biggest increase week over week.

“As some states begin to re-open businesses, those states will likely see demand increase and pump prices will likely follow suit” said Lori Weaver public and government affairs manager. “Although U.S. gasoline demand has incrementally increased, it remains below 6 million barrels a day.”

The current average in Kentucky is down 12 cents from a month ago and considerably lower than the average of $2.70 seen a year ago. In Lexington, the average price is now $1.46, an 8 cent climb from last week, but still down 8 cents from last month.

In Nicholasville, the average price is up 6 cents from last week, landing at $1.40, while the average jumped up a quarter in Georgetown, landing at $1.45. Versailles is also up nearly a dime at $1.46 and Winchester’s average today is slightly higher at $1.49. Richmond is holding steady at $1.63.

State gas price averages increased for less than a dozen states in the last week, but they were large enough jumps to push an increase to the national average. At $1.78, today’s average is a penny more expensive than last week, 16 cents less than a month ago and $1.11 cheaper than last year at this time.

On the week, the Great Lakes and Central region saw double-digit increases in a few states, but the bulk of the country saw decreases of a nickel or less. Pump price fluctuation will continue across the country in coming weeks, especially as more states re-open and motorists begin driving more.

Quick Stats

  • The nation’s top 10 largest weekly changes are: Wisconsin (+27 cents), Ohio (+19 cents), Indiana (+16 cents), Michigan (+13 cents), Iowa (+7 cents), Illinois (+6 cents), Kentucky (+6 cents), Utah (-6 cents), Montana (-6 cents) and Wyoming (-5 cents).
  • The nation’s top 10 least expensive markets are: Oklahoma ($1.37), Arkansas ($1.39), Missouri ($1.44), Kansas ($1.46), Wisconsin ($1.46), Mississippi ($1.48), Kentucky ($1.49), Texas ($1.49), Michigan ($1.53) and Tennessee ($1.54).

Great Lakes and Central States
After nearly eight weeks of some of the largest pump price declines in the country, many of the Great Lakes and Central States have seen significant increases in the past week. Wisconsin (+27 cents), Ohio (+19 cents), Indiana (+16 cents) and Michigan (+13 cents) top the charts for the biggest weekly increases in the country, all with double-digit jumps. However, increases are not universal for the region. A handful of states are seeing gas prices continue to decline, just at a few pennies on the week.

While regional gasoline stocks decreased for a third week, refinery rates jumped from 65 percent up to 72 percent in the Energy Information Administration’s (EIA) latest report. Refineries could be increasing production ahead of a number of Great Lakes and Central States phasing in business reopening, which is also one factor contributing to this past week’s gas prices. Motorists in the region can expect prices to continue to increase in the coming week, although how much will vary by state from pennies to a dime or more.

At the end of Friday’s formal trading session, WTI increased by 94 cents to settle at $19.78 per barrel. Crude prices increased last week amid growing market optimism that an oversupply of crude may be beginning to decrease, as demand for gasoline moves up and the 9.7 million barrels per day production reduction agreement between the Organization of the Petroleum Exporting Countries and other major crude producers, including Russia, takes effect this month and next month.

For this week, crude prices may continue to rise if EIA’s report this week shows continued growth in gasoline demand and crude production and storage data show that global rebalancing efforts are helping to stabilize the market, as global crude demand remains low due to the ongoing COVID-19 pandemic.

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