Fuel Prices Show No Signs of Dropping

BY DAN GRANT, FARM WEEK NOW

Farmers and other users of motor fuel are shelling out more money at the pump this year.

And it appears that trend will continue.

Average U.S. gasoline prices rallied to $2.81 per gallon May 1, according to AAA.  

It marked the highest per-gallon price since November 2014. Prices at the pump that year averaged $3.34 and peaked at $3.70 in April before plunging to $2.25 by December.

So, will the national average gasoline price surpass the $3 mark this year?

Average prices are above $3 in six western states, led by California at $3.61 per gallon, and in Alaska, Hawaii and Pennsylvania. This week’s average price in Illinois is $2.86, AAA reported.

“I think (fuel retailers) will do their best to hold it to $2.99 or lower as long as they can,” said Jackie McKinnis, GROWMARK senior energy analyst. “There will be people doing less driving if it goes over $3.”

The Energy Information Administration (EIA) projects the average price of regular gasoline for the summer driving season will soar from $2.41 per gallon a year ago to $2.74 this year.

“The higher forecast gasoline prices are primarily the result of higher forecast crude oil prices,” EIA noted in its short-term energy outlook.

U.S. oil prices are currently hovering near $70 per barrel. EIA projects oil prices for the year will average $59.37 per barrel, up from $50.79 last year and $43.33 in 2016.