Drop in crude oil prices keep U.S. gas prices low

A drop in crude oil prices was a relief for U.S. consumers who saw retail gas prices drop in kind, but the relief may be short-lived, a market analysis finds.

Motor club AAA reports a national average retail price for a gallon of regular unleaded at $2.29, a slight drop from the previous day and the eleventh consecutive day for a decline. That follows a dramatic drop last week in crude oil prices, which account for the bulk of what consumers pay at the pump.

"Gas prices may continue to drop in the near future due to declining crude oil prices and a well-supplied market, but will begin to creep up again over the next month due to seasonal refinery maintenance and the May 1 required switchover for producing summer-blend gasoline," the motor club's weekly retail market report read.

Crude oil prices held steady at around $55 per barrel for most of the year, but a steady build in U.S. crude oil inventories and production broke the streak. That put negative pressure on gas prices, though the summer blend of gasoline, which requires additional environmental safeguards for warmer summer months, is more expensive to make and will have the opposite effect.

Drivers in the West Coast cope with the most expensive market in the Lower 48 states and refinery maintenance there was putting a crimp on supplies, adding insult to injury. Price increases were modest in the region, though California broke through the $3 per gallon mark to post a state average price of $3.01, the highest in the Lower 48.

The Great Lakes states region, meanwhile, was an anomaly, with prices declining despite at least three Illinois refineries moving through unplanned maintenance phases before the switch to summer gasoline. Despite the pressure on supplies, Indiana gas prices declined 4.5 percent from last week, the greatest regionally, to reach $2.15 early Tuesday.

A federal report from last week predicted a national average price for the year at $2.40 per gallon and $2.44 per gallon for 2018. The February national average was $2.30 per gallon.