AAA Reports Gas Prices Dropped, Then Rose With Winter Cold

MINNEAPOLIS, Jan. 18, 2005 -- The national average price of self- serve regular gasoline is $1.81, down 1 cent since mid-December. The current national pump price average, however, is 21 cents higher than one year ago.

"The recent surge of cold weather and the increased demand for heating oil have driven crude oil prices higher, from $45 per barrel last week to more than $48 today," said Dawn Duffy, AAA spokesperson. "This increased heating oil consumption -- most notably in the northeast, where it is used heavily -- has led to refiners producing more heating oil. This, in turn, has increased the demand for crude oil and diverted refining efforts away from gasoline production."

In addition, two significant upcoming events on January 30, 2005, are likely to affect crude oil prices -- Iraq's elections and OPEC's meeting in Vienna. Insurgent activity in Iraq is expected to remain high leading up to that nation's elections and individual attacks could target that nation's oil infrastructure. If elections occur successfully and insurgent activity drops off, however, crude oil price likely would fall significantly as concerns about Middle East instability lessens. Also that day, OPEC is expected to consider production cuts in anticipation of the usual annual drop in demand when winter ends in the northern hemisphere.

Reports for January 18, 2005, reflect the following average prices per gallon for self-serve, regular unleaded gas:

                                   Current       Month Ago       Year Ago
  National                          $1.81           $1.82         $1.60
  Minnesota                         $1.79           $1.73         $1.59
  Duluth                            $1.83           $1.80         $1.59
  Minneapolis/St. Paul              $1.79           $1.70         $1.60
  Rochester                         $1.78           $1.70         $1.54
  St. Cloud                         $1.77           $1.73         $1.61

AAA's Fuel Gauge Report is based upon data from the Oil Price Information Service, the nation's most comprehensive source of petroleum pricing statistics, and can be found at http://www.fuelgaugereport.com/ .

AAA offers automotive, travel, insurance and financial services to more than 45 million members in the United States and Canada. AAA Minnesota/Iowa is part of The Auto Club Group, with 4.1 million members in eight Midwest states. AAA Minneapolis serves more than 175,000 members in Hennepin County.