Pipeline issues cause Utah gas prices to soar

Despite adequate supplies and lower crude oil prices nationally, Utah has seen its average gasoline prices climb to ninth-highest in the nation. Early last week the average gasoline price sat at $2.45 per gallon after the state landed in the top 10 for weekly cost increases. Gas prices were up 9 cents in just one week and 18 cents in a month.

Compared to last year, Utah’s motorists are paying 63 cents more at the pump. Of the Utah cities surveyed in the AAA Fuel Gauge Report, all reported double-digit increases in the past month. Moab reported the highest average price of $2.61, while the lowest price, $2.43, was reported in Logan, Ogden and Provo.

“The current high prices in Utah are not usual for this time of year because demand is typically rather low and refiners use these weeks to sell off supplies of winter formulated fuel before changing to summer blend,” said Rolayne Fairclough, AAA Utah spokesperson. “But, this is not a typical year. Pipeline issues, which are often headlines in the eastern and central states, are now local news. The Wahsatch Pipeline — which receives crude oil from locations near Evanston, Wyoming, and delivers it to the Salt Lake refineries — shut down on Feb. 10 due to indications of soil movement. The Plains All American Pipeline Co. [has now] completed the repairs to the pipeline. This shutdown forced local refiners to cut production rates and to rely on crude delivery by trucks, which decreased production and increased transportation costs.”

The national gas average price reflects typical pricing for this time of year coupled with the robust supplies and low crude prices. Last week’s national average price was $2.29, just 1 cent higher than a month earlier. The highest average price in the country is found in Hawaii at $3.08 while California has the highest price in the contiguous states at $3. Motorists in South Carolina are enjoying the lowest average price at $2.03.

“Gasoline prices may continue to drop nationally in the near future due to declining oil prices and a well-supplied market,” Fairclough said. “Prices can be expected to move upward over the next month due to refinery maintenance and the May 1 deadline for switching over to summer-blend gasoline.”

Crude oil prices continue to drop as the global oil market remains oversupplied. High U.S. production levels supports bearish market sentiment. The possibility of continued production compliance by OPEC is likely to keep the market unsteady in the near term. Traders will likely keep an eye on OPEC production cut compliance and U.S. supply and production.

AAA’s Fuel Gauge Report is a comprehensive retail gasoline survey with over 100,000 self-serve stations surveyed daily nationwide. Data is provided in cooperation with OPIS Energy Group and Wright Express LLC.