Gas Prices on the Rise

Gas prices are on the rise. Since mid-March, the U.S. average gas price has gone up from $2.50 to $3.00, marking the highest level since mid-2015. Utah and Idaho have represented some of the highest gas prices in the nation with Utah in particular rising from $2.30 to $3.10. Given the rising tensions in the Middle East and the summer driving season, prices do not appear to be going down anytime soon.

As the oil glut of the mid-2010s came to an end, gas prices largely returned to a stable range of around $2.50. That was until mid-March, when concerns about President Trump’s actions surrounding the Iran deal began pushing oil prices up. His ultimate announcement of withdrawal from the Iran deal and potential freezing of Iranian oil exports in early May helped cement the rise. Lowering of stockpiles in the U.S. and supply issues in Libya and Canada have ensured that oil prices above $70 are likely to continue.

While national oil price trends explain a lot of the spike in gas prices, they don’t explain the sudden spike of gas prices in the Intermountain West. Regional gas prices are much more vulnerable to price fluctuations due to supply interruptions and issues in production. One such event occurred in Utah during the same period of time as the spike in gas prices. On March 12th, the HollyFrontier refinery in Woods Cross, Utah had a fire. While no one was injured, the damage was bad enough to take almost a third of its production offline for an extended period of time. This lack of local production has led to higher gas prices in areas such as Utah and Idaho that rely on Wasatch Front refineries for much of their gas. Until HolyFrontier’s production capability gets back to normal, expect Intermountain states to keep some of the highest gas prices in the nation.