Gasoline Prices Skyrocketing in Mountain State

According to AAA’s Fuel Gauge, crude prices churned higher throughout the week on escalating unrest in Libya. After a temporary burst above $100 per barrel, prices pulled back slightly over the weekend, crude oil prices were relatively stable yesterday, settling down $0.91 at $96.97 at the close of formal trading on the NYMEX. This settlement price marks a more than $3 increase from last Tuesday and a more than $12 increase from just two weeks ago.

The oil markets began trading last Tuesday by playing catch-up in pricing in the long weekend’s developments in Northern Africa and the Middle East, most notably the dramatic escalation of protests in Libya. Concern of a potential impact on the region’s oil production drove prices higher by $7.37— or nearly 9% — to start the week, and had analysts discussing the possible impact on global supply.

Libya is one of the twelve members of the Organization of the Petroleum Exporting Countries (OPEC), which collectively holds more that 44% of the world’s oil reserves, and as a country, has the largest proven reserves in Africa.  Libya currently produces 1.6 million barrels per day -- making it the world’s 15th-largest exporter.

Last week Libya declared “force majeure” on oil exports from the country. This is a clause used to relieve a party of their contractual obligations in the event of circumstances beyond their control. In this case, Libya invoked the clause on its crude obligations, effectively halting oil export from the country. This news came with images of escalating violence in the country as Libyan leader Muammar Gaddafi continued to order violent responses to protests calling for his resignation, and was enough to send crude prices to overnight triple digit levels not seen since 2008. The market was calmed somewhat by OPEC statements that the organization would off-set any lost production from Libya. This was enough to bring prices back below the $100 per barrel level where they remained to end the week.

The run-up in crude prices last week has been mirrored by the price that drivers are paying at the pump. All states now have an average price for regular gasoline above $3 per gallon. The current national retail average price for a gallon of self-serve regular gasoline is $3.375, up 20.4 cents from a week ago and 67 cents higher from a year ago.

This week’s average prices: West Virginia Average                       $3.398

Average price during the week of February 22, 2011                    $3.194

Average price during the week of March 2, 2010                           $2.724

The following is a list of the average price of unleaded self-serve gasoline in various areas:

AAA East Central is a not-for-profit association with 80 local offices in Pennsylvania, West Virginia, Ohio, New York and Kentucky servicing 2.5 million members.