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Written by Matt Davis on January 8, 2018. Posted in News/Weather

The price at the pump held relatively steady during the first seven days of the year, according to AAA, The Auto Club Group, which reports that gas prices in Georgia averaged $2.36 on Sunday.  The state average increased by a cent over the week and is 10 cents higher than this time last year.

Gas prices remain elevated due to strong oil prices.  West Texas Intermediate settled above $62 a barrel last week for the first time since December 2013 as global supply levels tighten.

The first week of the new year is historically strong for oil prices, then low demand in winter pushes them lower in the following month or two.  At the same time, gasoline demand, as measured by the EIA (or Energy Information Administration), has dropped significantly, contributing to a strong build in fuel availability.  This phenomenon is normal at this time of year and usually leads to lower gas prices in January and February.

AAA spokesman Mark Jenkins states, “Retail prices could drop 5-15 cents in the next month and a half, while supply outpaces demand.  Unfortunately, springtime is as a springboard for prices at the pump, and we may see a 40-50 cent jump by the summer.  Of course, this forecast could change dramatically if there are unexpected shifts in fuel supply and/or the stock market.”

Gas prices normally rise in the spring as demand grows and supplies tighten.  This spring is expected to be particularly busy for refineries, as last autumn’s maintenance season was disrupted by hurricanes.  This is anticipated to put gas prices on the higher end of the 30-75 cent price hike that normally occurs in the spring.

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