U.S. fuel prices near month ago levels, unlikely to change

"With gasoline stocks sitting at their highest level on record, 259.1 million barrels, coupled with colder-than-normal weather forecasted for much of the Midwest and East Coast, motorists are likely to see demand drop and gas prices decrease or hold steady this week," said AAA spokesperson Jeanette Casselano.

Gasoline prices as of Monday were on average just one cent higher than a week earlier, and only three cents lower than in the previous month, the driver's organization said. Prices are 33 cents below a year ago.

The Great Lakes and Central region saw some of the biggest weekly increases with drivers in Ohio, Michigan and Indiana paying on average between 10 and 8 cents more per gallon than a week earlier. However, all other states in this area saw prices decline or hold steady.

The AAA said that retailers may have increased prices ahead of winter storms as motorist wanted to stock up. However, gasoline stocks in that region at their highest level since 2016 prevented increases.

In the South and Southeast, Georgia led increases with a 7 cents per gallon average price rise, followed by Texas and Alabama, both 5 cents per gallon higher. However, other states like Florida and New Mexico saw small drops.

The AAA described gasoline stocks in the South and Southeast as "hefty" and helping to keep price increases moderate.

In the Rockies, "drivers continue to see some of the largest" gasoline price decreases in the country with Utah leading declines with a 5 cent per gallon average drop. Gasoline stocks in the region were flat from a week earlier, the AAA said.

As for the Mid-Atlantic and Northeast, North Carolina led price increases with a 5 cent per gallon rise. Most states, however, saw prices lower with Vermont, Connecticut, Massachusetts, New York, New Hampshire and Rhode Island seeing average drops between 2 and 3 cents per gallon.

The AAA described the region's gasoline stocks as "staggering" which minimizes fluctuations.

In the West Coast, where prices are the highest in the nation in part due to stricter pollution controls, "prices are falling with all state averages moving lower." Alaska, where fuel prices declined 5 cents per gallon, saw the biggest drop.

The West Coast gasoline stocks built by 900,000 barrels during the recent week but are still 2.2 million barrels lower than a year ago.

Fuel sold in service stations across most of the United States is a combination of either RBOB, Reformulate Gasoline Blendstock for Oxygenate Blending, or CBOB, Conventional Blendstock for Oxygenate Blending. Some states use RBOB and others CBOB. California mandates a special formula named CARBOB.

These blendstock products are all naphtha obtained from crude oil. The naphtha is in most cases later mixed with about 10 percent ethanol, which is an oxygenate added so that the ending emission is cleaner.

RBOB gasoline futures for February delivery were quoted Tuesday morning at $1.34 per gallon. This compares with $1.39 per gallon on January 15 for February delivery, according to CME Group data.

Ethanol, which is alcohol that in the United States is mostly derived from corn, was quoted early Tuesday at $1.26 for February delivery, lower than $1.29 per gallon for February delivery on January 15.