After gas prices peaked in April, they entered a downward trend until last week when motorists saw prices jump overnight. Bullish news hit the market at the start of the month and caused oil prices to spike, which has led to the rise at the pump.
The two main factors that pushed oil prices higher last week were imposed European sanctions against Iran and an agreed upon plan by European leaders to save the euro and resolve the ongoing debt crisis. While tensions with Iran drove both oil and gas prices up during the first quarter of the year, tensions died down after members of the United Nations met with Iran about their nuclear efforts. However, concerns Iran will block the Strait of Hormuz and disrupt global oil supply resurfaced as European sanctions against the country went into effect on July 1.
During the same week, European leaders announced they agreed on a plan to save the euro and correct the two-year debt crisis faced by many European countries. The mere announcement of the plan sparked optimism in the market that fuel demand will increase in Europe and the economy will start to recover. The European news, among other things, pushed oil prices to $88 a barrel last week, however the upward pressure soon dissipated after more pessimistic economic news was released. A barrel of oil settled Friday at $84.45 on the New York Mercantile Exchange—51 cents less than the prior week.
"Although oil prices retreated at the end of last week, it's likely motorists have seen the last of the summer price reductions at the pump," said Jessica Brady, AAA spokeswoman, The Auto Club Group. "State averages for gasoline increased across the southeast this week and retail prices will start to stabilize as more balanced pressure is weighed on the market. While some local retailers have already started to post higher gas prices, drivers can still find relatively cheap gas by filling up in areas where there's ample competition, paying with cash, or by using AAA's TripTik Mobile app that allows motorists to search for the cheapest gas stations prior to filling up."
The national average price of regular unleaded gasoline is $3.38, 5 cents more than last week. Florida’s average of $3.26 increased 7 cents from last week. While Georgia’s state average of $3.21 and Tennessee’s average price of $3.09 rose 8 cents from last week, respectively. Visit AAA’s Daily Fuel Gauge Report to find national, state, and local metro market retail gasoline prices.
Current and past gas price averages: National: