Gas prices in Minnesota have risen about 80 percent from historic lows in early February, but state drivers are still paying less for fuel on a Memorial Day weekend than they have in at least seven years.
Minnesota’s average price for a regular unleaded gallon of gas Friday was $2.27, compared to a national average of $2.32, according to GasBuddy.com. Motorists in the Twin Cities were paying a bit more than their outstate brethren: $2.29.
Gasoline prices have risen with oil prices, which have soared about 90 percent from a 13-year low in February to around $50 a barrel this week. At the same time, gasoline demand has been rising, even before warm weather set in, said Patrick DeHaan, a petroleum analyst at GasBuddy.
Memorial Day weekend marks the beginning of the summer driving season, when gasoline demand usually peaks. Despite the jump in oil prices recently, DeHaan doesn’t see major gasoline price hikes this summer — barring of course a sudden oil supply shock.
“I don’t see a lot of price fluctuations,” he said. “It’s going to be the cheapest summer since 2005.”
Oil prices broke below $50 a barrel last fall, as major producing nations continued pumping out crude at high rates despite declining global demand. By February, with oil sloshing around at $32 a barrel, gasoline prices tumbled, hitting an average of $1.45 in Minnesota, and just a bit more nationally, according to GasBuddy.
When adjusted for inflation, those early February gas prices were some of the lowest in many decades.
Consumers took notice, filling up and drawing down gasoline supplies. “Record inventories of gasoline have been chiseled away in light of lower prices,” DeHaan said. “Motorists continued to put a lot of demand on the system in March and April.”
With inventories falling faster than expected, there have been “kinks” in the refinery system that have added to gas prices recently, DeHaan said. Spring is usually when refineries do maintenance. For some refineries in Michigan and Ohio, there’s been a “pinch” since projects aren’t done yet.
DeHaan said he thought that any spring maintenance projects were complete at Minnesota’s two refineries, including the big Pine Bend refinery in Rosemount. Flint Hills Resources said it doesn’t comment on gas prices and maintenance schedules due to antitrust concerns. The Rosemount refinery provides about half of the motor fuel used in Minnesota.
While gas prices are climbing again, they are still tame when viewed historically. From the beginning of 2011 through 2014, gasoline in Minnesota often cost well over $3 a gallon.