Pump prices rise for sixth straight week

Arkansas motorists should not expect the normal cooling off period at the pump this winter as international crude oil prices continue to push local and U.S. gas prices well above $3 a gallon for regular unleaded.

According to the Energy Information Administration and the AAA’s weekly fuel gauge report, Arkansas pump prices have increase for the sixth consecutive week, and are projected to move well above $3 a gallon through the rest of 2011 and beyond.

Rising crude oil prices are the primary reason for higher retail prices, but higher gasoline and distillate refining margins are also contributing to what consumers are seeing in local markets, the EIA said.

In trading Wednesday, crude oil for February delivery was up 55 cents at $91.93 a barrel on the New York Mercantile Exchange. Earlier this week, OPEC officials said the cartel would not boost production even if oil tops $100 a barrel, even though some economists have warned that higher energy prices could stifle growth.

“Oil prices are trading at nearly $90 per barrel, which is having an enormous effect on the price of gasoline at the pump," said Beth Mosher, spokeswoman for AAA’s Chicago office. "Unfortunately, at least in the near-term, consumers should get used to paying these high prices at the pump."

In its most recent short-term forecast, the EIA projects the price of West Texas Intermediate (WTI) crude oil to average about $93 per barrel in 2011, $14 higher than the average price last year. For 2012, EIA expects WTI prices to continue to rise, with a forecast average price of $99 per barrel in the fourth quarter 2012.

EIA expects regular unleaded retail prices to average $3.17 per gallon this year, 39 cents per gallon higher than last year. Retail projections for 2012 will rise to $3.29 per gallon, with prices forecast to average about 5 cents per gallon higher in each year during the April through September peak driving season.

Although the Gulf Coast market area where Arkansas is located trends slight lower than other U.S. markets, local prices are not far behind the national average.

According to AAA’s daily fuel gauge report, Arkansas motorists are paying $2.98 per gallon for regular unleaded, up two cents from a week ago and 37 cents higher than a year ago. Retail diesel prices are averaging about $3.30 a gallon.

Pump prices in Arkansas’ metropolitan areas range from a low of $2.96 per gallon in Texarkana and Little Rock to a high of nearly $3.00 in Texarkana and the Fayetteville-Springdale area. Fort Smith motorists are paying about $2.98 per gallon to fill up their tanks.

Meanwhile, Arkansas consumers who use gas and electric should get some slight relief on their heating bills through the rest of the winter. The EIA expects average household expenditures for space-heating fuels to total $990 this winter, about $22 higher than last year.

The EIA projects higher expenditures for heating oil and propane, flat expenditures for natural gas, but lower expenditures for electricity. A forecast of milder weather than last winter in the South and the West leads to lower fuel consumption in those areas.