National gas price exceeds year ago average for first time in 340 days; Kentucky rises 6 cents

LEXINGTON, Ky. (WTVQ/AAA) – At $2.46, the national gas price average is more expensive on the week (+4 cents), the month (+16 cents) and the year (+2 cents).

This past Saturday, February 6, was the first time in 340 days the national average was more expensive than a year ago.

Monday, nearly two-thirds of all state gas price averages are more expensive year-over-year, including Kentucky where prices are a dime higher than this time last year. Pump prices continue to climb, in part due to expensive crude oil and the market’s growing optimism that demand will increase amid the vaccination roll-out.

“Consumers can expect to continue paying more to fill up this month, potentially up to 10 cents more a gallon, depending on how high crude goes,” said Lori Weaver Hawkins, public and government affairs manager, AAA Blue Grass. “If demand grows, that will further fuel pump price increases.”

Crude oil increased last week up to $56 a barrel following Organization of the Petroleum Exporting Countries’ (OPEC) decision to keep their production cuts unchanged—a decision influenced by the ongoing impact of the pandemic on gasoline demand. Crude has not been priced this high since January 2020. Typically, it can take a few weeks before pump prices see the impact of more expensive crude, and with crude accounting for more than 50% of the retail price, increases are no doubt going to continue.

On the week, 46 state gas price averages are more expensive, with 13 states seeing a nickel or more increase, including Kentucky at 6 cents higher. Motorists in Florida (+11 cents), Michigan (+11 cents) and West Virginia (+10 cents) saw the largest weekly increases.

Monday’s average of $2.31 in Kentucky is 6 cents higher than last week and 11 cents more than a month ago.

The gas price in Kentucky is now a dime higher than the Commonwealth’s average of $2.21 seen a year ago. That’s the story this week across many parts of the Bluegrass.

In Lexington, the average price is still rising rapidly, up 14 cents from last week to land at $2.36. That’s 9 cents higher than a month ago.

Surrounding communities have also seen gas prices rise in the past week, some by nearly 20 cents.

In Nicholasville, the average price is up 11 cents, now at $2.30. Georgetown is up 19 cents, now averaging $2.39. Versailles is up 11 cents to land at $2.39, while Winchester is up 19 cents to land at $2.39. Richmond is up 11 cents, landing at $2.38.

Owensboro remains the community with the lowest price in Kentucky at $2.20. The Huntington-Ashland area surpasses Louisville as the high spot in the Commonwealth, soaring 26 cents since last week to land at $2.49.

Quick Stats

• The nation’s top 10 largest weekly increases: Florida (+11 cents), Michigan (+11 cents), West Virginia (+10 cents), Missouri (+6 cents), Wisconsin (+6 cents), Pennsylvania (+6 cents), Connecticut (+6 cents), Kentucky (+6 cents), Illinois (+5 cents) and Louisiana (+5 cents).
• The nation’s top 10 least expensive markets: Mississippi ($2.14), Texas ($2.16), Oklahoma ($2.18), Missouri ($2.19), Louisiana ($2.20), Arkansas ($2.21), South Carolina ($2.22), Kansas ($2.23) and Tennessee ($2.23).

At the close of Friday’s formal trading session, WTI increased by 62 cents to settle at $56.85. Crude prices rose last week after OPEC and its production reduction agreement partners met to review compliance with their agreement to collectively reduce crude production by 7.2 million barrels per day.

The group decided to hold the cuts steady and expects output to remain low this year since demand is forecasted to be lower than expected in 2021, due to ongoing crude demand concerns as the pandemic continues. Crude prices were also bolstered by the Energy Information Administration’s (EIA) latest report showing that total domestic crude inventories dropped by 1 million barrels to 475.7 million barrels. For this week, crude prices may continue to climb if the next weekly EIA report shows another reduction in total domestic crude inventories.