Why are gas prices going up?
FARGO—There's an unsettling and unwelcoming trend settling into the region and it's not expected to go away anytime soon, according to petroleum industry experts.
As of Thursday, Feb. 1, the average price for a gallon of gasoline in the United States is $2.60, according to GasBuddy. That number is 18 cents higher than the original forecasted average for February of $2.42 per gallon.
Minnesota, North Dakota and South Dakota all rank near the middle of the pack as far as average price per gallon of gas among all 50 states.
Among the three states, South Dakota is ranked highest at No. 22, averaging $2.53 per gallon. North Dakota and Minnesota go back-to-back in the rankings at No.'s 26 and 27, respectively. The average price per gallon of gas in North Dakota as of Feb. 1, is $2.578, with Minnesota coming in slightly higher at $2.583.
Here is a list of cities in the tri-state area along with their average price per gallon of gas:
• Williston, N.D.: $2.65
• Minot, N.D.: $2.69
• Bismarck: $2.76
• Fargo: $2.46
• Grand Forks: $2.59
• Minneapolis: $2.63
• St. Cloud, Minn.: $2.60
• Duluth, Minn.: $2.65
• Willmar, Minn.: $2.61
• Bemidji, Minn.: $2.60
• Sioux Falls, S.D.: $2.62
• Rapid City, S.D. $2.24
• Aberdeen, S.D.: $2.59
Why are these numbers significant? According to data released by GasBuddy, prices per gallon of gas in Fargo, Sioux Falls and Minneapolis, on average, are the highest they've been since August 2015. GasBuddy did not release data for any other cities listed previously.
While there's no definitive, clear-cut reason as to why gas prices continue to rise, industry experts believe that, ultimately, OPEC bears much of the responsibility. OPEC's continued efforts to continue cutting oil production has resulted in oil inventories in 2018 being nearly 50 million barrels (1.8 million per day) lower than a year ago, according to GasBuddy head petroleum analyst Patrick DeHaan.
"Understanding many factors, including OPEC, fuel taxes, the economy and their impact on supply and demand is integral to providing a thorough and balanced outlook on gas prices for 2018," DeHaan says. "Even one event can completely change trajectory of fuel prices for months. Look what impact Hurricane Harvey and Irma had on gas prices and availability. No one could have expected the unexpected, but still, our forecast was less than a dime away from being spot on."
"While gasoline prices overall remain affordable, one aspect that continues to worsen is the gap between what stations are charging. It's become nothing short of crazy how one station might sell gasoline 20-40 cents lower or higher than a nearby competitor."
DeHaan adds that the record level of oil being exported by the U.S. is also leading to a rise in prices here. In 2016, the Obama administration, as part of the 2016 spending bill, included a provision that allowed the export of U.S. crude for the first time in more than 40 years. The more oil that is being exported, the less inventory the U.S. has.
In 2018, an average household can expect a spending increase of $133 compared to 2017, according to GasBuddy. An average household is projected to spend $1,898 on gasoline in 2018, compared to $1,765 in 2017.
Nationwide, on average, the cost per gallon of gas is expected to peak in May at $2.73, ranging from as low as $2.57 per gallon to as high as $2.88.