The price of gasoline looks familiar this Memorial Day. For the third year in a row, the national average will be within a penny or two of $3.64 per gallon.
Stability wasn’t always the norm. Between 2003 and 2008 average retail gasoline prices more than doubled, reaching an all-time high of $4.11 per gallon in 2008. Prices then collapsed as the U.S. plunged into recession. But after a two-year run-up between 2009 and 2011, the price of gasoline has remained in a range of roughly $3.25 to $3.75 per gallon.
Steady gasoline prices largely are the result of relatively steady crude oil prices, even though there has been a long list of global supply disruptions and political turmoil that typically would push the price of oil higher.
Sanctions have sharply cut output from Iran, once the world’s third largest oil exporter. Libya went through civil war, and labor and political disruptions continue to limit its exports. Venezuela’s oil output has been steadily declining for a decade. Most recently, the conflict between Russia and Ukraine is raising concerns that sanctions will impact production or exports from Russia, the world’s second largest exporter after Saudi Arabia.
But rising crude output in countries such as the U.S., Canada and Brazil have offset the declining supply elsewhere, helping to keep prices steady.
Approaching this Memorial Day, the national average is $3.65 per gallon, according to AAA, OPIS and Wright Express. Last year on the holiday it was $3.63 per gallon. In 2012 it was $3.64.
Averages only tell part of the story, though. Tom Kloza, chief oil analyst at the Oil Price Information Service and Gasbuddy.com, compares the national average price of gasoline to the average temperature of the country — outside your door it’s almost certainly hotter or cooler than the average.
This year, drivers in the Midwest, Great Plains states and the Rockies are paying quite a bit less than they did a year ago on Memorial Day weekend. The Minnesota average of $3.49 is 78 cents lower than last year, the biggest drop in the nation. Drivers in North Dakota, Nebraska, Oklahoma, Iowa and Kansas are all paying at least 50 cents per gallon less.
That’s because last year some big Midwest refineries were taken offline to be upgraded to handle cheaper Canadian crude oil. That work is done and the refineries are churning out a lot of fuel, pushing down prices in the region.
Across the nation, all U.S. drivers will likely be paying less in the coming weeks, the result of a typical seasonal decline between late spring and early summer.
“Temperate-to-lower prices is the most likely path for the next couple of months,” Kloza says. “And then in hurricane season you just cross your fingers.”