Minnesota's less-painÂful gasoÂline prices have evÂapoÂratÂed.
MotorÂists had been payÂing less than $3 per galÂlon at the pump through much of DeÂcemÂber, inÂcludÂing a 2013 state-reÂcord avÂerÂage low of $2.92 a few days beÂfore ChristÂmas.
But it didn't last. The stateÂwide avÂerÂage price of reguÂlar gasoÂline rose 24 cents to $3.16 per galÂlon over the past 12 days, acÂcordÂing to AAA data.
"That is a very draÂmatÂic price hike, and it is not someÂthing that drivÂers in Minnesota see very ofÂten," said Michael Green of AAA's Daily Fuel Gauge Report, which tracks gasoÂline prices based on credÂit-card swipes.
Green said prices have stabilized in the past couÂple of days. A holÂiÂday-seaÂson price jump also hapÂpened last year — only to be folÂlowed by sigÂnifÂiÂcantÂly lowÂer prices in JanÂuÂarÂy.
It's been a year of seesaw gas prices. Minnesota is one of two states where gas prices in 2013 at one point exÂceedÂed $4 per galÂlon — back in May — while dripÂping beÂlow $3 at othÂer points, said Tom Kloza, chief oil anÂaÂlyst with ÂGasBuddy.com.
SevÂerÂal facÂtors may exÂplain the latÂest upÂtick, anaÂlysts said.
PeoÂple are drivÂing more, boostÂing gasoÂline deÂmand. The price of light crude oil also is up this month to $99 per barÂrel. Some Midwest reÂfinÂeries are not opÂerÂatÂing at peak, and the St. Paul Park reÂfinÂerÂy, the smallÂer of two reÂfinÂeries in Minnesota, could face a strike TuesÂday if neÂgoÂtiaÂtions with the unÂion repÂreÂsentÂing nearÂly 200 opÂeraÂtors reach an imÂpasse.
Even with the latÂest inÂcrease, MinÂneÂsoÂtans still paid less than motorÂists in 32 states, with ConÂnecÂtiÂcut drivÂers payÂing $3.70 per galÂlon, the highÂest avÂerÂage price in the Lower 48 states, AAA data showed. MonÂtanÂa had the lowÂest ÂavÂerÂage price on MonÂday, $3.01 per galÂlon.
What's going up?
Driving and fuel deÂmand are up. AAA, which also tracks holÂiÂday travÂel, proÂjectÂed that 85.8 milÂlion AmeriÂcans — or one in four — are takÂing road trips beÂtween Dec. 21 and Jan. 1. It is the fifth conÂsecÂuÂtive annuÂal inÂcrease, and the highÂest travÂel volÂume ever proÂjectÂed by the memÂberÂship travÂel servÂice.
U.S. fuel conÂsumpÂtion inÂcreased in NoÂvemÂber to the highÂest level for that month in six years, with gasoÂline up 5.4 percent, the American Petroleum Institute reÂportÂed last week.
"The numÂbers have been pretÂty specÂtacÂuÂlar," Kloza of GasBuddy.com said of the late-year spike in deÂmand.
But he addÂed that "gasoÂline deÂmand is very, very lumpy" and it could fall off in JanÂuÂarÂy as low temÂperaÂtures and winÂter weathÂer keep drivÂers at home. That tends to bring prices down, as hapÂpened last JanÂuÂarÂy when Minnesotans were paying less than $3 per gallon.
LookÂing aÂhead, Kloza said, many comÂmodÂiÂty fuÂtures tradÂers seem to be betÂting on highÂer peÂtroÂleÂum prices.
"We are going to end 2013 with the greatÂest aÂmount of fiÂnanÂcial monÂey inÂvestÂed in the long side of crude," he said. "There is lot of monÂey that has pumped up the price."
Alex Breitinger, a comÂmodiÂties fuÂtures broÂker with ÂParÂaÂgon InÂvestÂments in Valparaiso, Ind., said reÂfinÂerÂy shutÂdowns in the NorthÂeast and inÂterÂnaÂtionÂal facÂtors are afÂfectÂing the world oil market.
The marÂket had anÂticÂiÂpated a sigÂnifiÂcant flow of oil from Iran amid opÂtiÂmism that an acÂcord over its nuÂclear weapons program would ease trade sancÂtions, he said. "That didn't hapÂpen," Breitinger said, so tradÂers stopped betÂting on a peace disÂcount.
He also said that U.S. oil comÂpanies, though barÂred from exÂportÂing crude oil, are now exÂportÂing reÂfined gasoÂline to LatÂin America.
"U.S. citÂiÂzens are now in comÂpeÂtiÂtion with bidÂders from MexiÂco and othÂers in LatÂin America," he said. "That reÂalÂly hadn't been going on unÂtil now."
Regional proÂducÂtion isÂsues also afÂfect prices. A large reÂfinÂerÂy in LeÂmont, Ill., is exÂpectÂed to ramp up proÂducÂtion in ÂJanÂuÂarÂy afÂter a fire in OcÂtoÂber cut proÂducÂtion, acÂcordÂing to Bloomberg News.
MeanÂwhile, the St. Paul Park reÂfinÂerÂy faces a Tuesday strike deadÂline by nearly 200 workÂers repÂreÂsentÂed by Teamsters Local 120. The unÂion and the reÂfinÂerÂy's manÂageÂment are conÂtinuÂing to neÂgoÂtiÂate.
On FriÂday, the unÂion warned the refinery is "on the brink of shutdown." Its business agent Chris Riley also said a probÂlem with a crude oil unit had reÂduced the reÂfinÂerÂy's outÂput. The refinery owner has neither conÂfirmed or denied the outÂage.
David Shaffer • 612-673-7090 Â• @ShafferStrib