With crude oil production cuts by OPEC and other nations leading the way, average retail gasoline prices in Kansas and nationally have surged upwards in recent weeks. However, analysts say a likely decline in demand after New Years and fractures in the oil-producing alliance may force prices back down.
In the Sunflower State, prices have risen eight cents per gallon in the past week, averaging $2.17 late this week, according to GasBuddy’s daily survey of 1,329 gas outlets in Kansas. This compares with the national average that has increased about 17 cents per gallon in the last week to $2.31 .
In Great Bend and Larned, the price was a tick below the state average at $2.15. The state low came at Salina with $1.93 and the high at Hays with $2.49.
Including the change in gas prices in Kansas during the past week, prices were over 40 cents per gallon higher than the same day one year ago and are about 30 cents per gallon higher than a month ago. The national average has increased about 20 cents per gallon during the last month and stands over 30 cents per gallon higher than this day one year ago.
According to GasBuddy’s historical data, gasoline prices on Dec. 27 in Kansas have ranged widely over the last five years: $1.74 in 2015, $2.02 in 2014, $3.01 in 2013, $3.06 in 2012 and $3.05 in 2011.
“While the benchmark West Texas Intermediate crude closed last week near $53 per barrel, it’s doubtful that we’ll see any momentum this week since trading is generally low volume between Christmas and New Year’s Day,” said Gregg Laskoski, senior petroleum analyst for GasBuddy. Similarly, expect the aggressive escalation that we saw for retail gasoline prices through much of December to stall out in the final week of the year.”
“Overall, the national average price of gas is 28 cents higher than where it was a year ago on this day and prices in most metros and states across the country are higher too; with the remarkable exception being California whose statewide average today is 13 cents lower than last year and the Los Angeles’ average, believe it or not, is 27 cents less than a year ago,” Laskoski noted.
These hikes placed the state in the top ten for highest increases on the week, the American Automobile Association reported. The average is now 22 percent higher than last year. Topeka holds on to the number 50 spot for the lowest average metro in the nation, and Wichita is seeing a 33 percent increase on average price over this time last year.
According to the AAA, the Organization of the Petroleum Exporting Countries efforts to curb oil production are aimed at rebalancing the oil supply and as a result, markets have reacted, causing retail prices to increase. The silver lining could be that typically the demand in January falls sharply and the prices may follow.
Retail averages have increased 28 of the past 30 days and prices have moved higher by fractions of a penny since Friday.
Last month, the OPEC,along with non-cartel countries, worked out an agreement to limit crude oil production by 1.8 million barrels per day beginning in January 2017. Last week, Libya announced the re-opening of pipelines from two major oil fields which has led many to speculate that increased production in Libya may counter OPEC’s anticipated cuts.