AAA: Gas prices continue upward trend
Prices at the pump increased slightly this week amidst national and international economic volatility. The national average for regular grade gasoline reached $3.71 Friday, up a penny from last week, up 17cents from a month ago and 97 cents higher than year-ago prices. Gas prices remain 40 cents below the all-time record high of $4.11/gallon set in July 2008.
Crude oil trended downward this week as traders and investors awaited a resolution to the U.S. debt situation ahead of the August 2 deadline to avert an unprecedented debt default by the world’s largest economy. Also contributing to the downward trend was the relative strength of the U.S. dollar and virtually flat gross domestic product (GDP) data. Oil did see brief bumps due to news from the U.S. Labor Department showing applications for unemployment benefits fell by 24,000 to 398,000 last week, the lowest level since April, and news from the housing markets that previously owned home sales rose unexpectedly in June, both indicators that demand for oil could be on the rise. Crude oil closed at $95.70 Friday, down 4 percent on the week.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks rose 2.3 million barrels to 354 million barrels, ending seven consecutive weeks of declines. Gasoline stocks rose 1 million barrels to 213.5 million barrels. The EIA also reported total petroleum demand was 18.426 million barrels per day (bpd), 428,000 bpd lower than the previous week and 1.2 million bpd below the same week in 2010. Petroleum demand for the past four weeks totaled 18.756 million bpd, down 2.9 percent from last year. Gasoline demand for the past week dropped below 9 million barrels per day (bpd) to 8.99 million bpd.
“Despite mid-summer increases, gas prices remain 10 cents below where they were at the start of the summer driving season (Memorial Day weekend),” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “The upward trend in recent weeks is directly related to the upward movement of crude oil prices, which have been affected by national and international financial situations. As some of these issues are resolved, especially the U.S. debt crisis, analysts believe crude oil, and ultimately gas prices, will gain some clarity. However, a default would likely mean higher crude prices as the dollar weakens against foreign currencies.”
Tropical Storm Don made landfall along the Texas coast Saturday, causing a shut down of 300,000 barrels a day or 6.8 percent of oil production from the Gulf of Mexico, home to 31 percent of the U.S. oil output. Such an interruption in oil production, albeit relatively small and not prolonged, will likely lead to a bump in oil prices in the short-term.
Gas prices back on the rise
Temperatures weren’t the only thing on the rise throughout the Mid-Atlantic region this week. After dipping down to a low of $3.54/gallon on June 30 (following an early-May peak of $3.98/gallon), gas prices continued their upward climb for the third straight week. The national average for regular grade gasoline rose to $3.70 Friday, up 3 cents from last week, up 7 cents from a month ago and 98 cents higher than prices a year ago. Despite recent gains, gas prices remain 41 cents below the all-time record high of $4.11/gallon set in July 2008.
Crude oil crossed the $100/barrel threshold during trading on Thursday before settling slightly below the triple-digit mark, an impressive comeback after the commodity tumbled more than 20 percent between the end of April and the end of June on the heels of disappointing global economic news. At its highest level in about a month, crude oil has responded positively to positive developments in the Greek debt crisis and movement in the debate over extending the U.S. debt ceiling by the August 2 deadline. In addition to a weak U.S. dollar, crude oil was also supported by some signs that U.S. economic recovery has begun showing signs of strength, with jobless claims in line with expectations and the Federal Reserve Bank of Philadelphia’s economic index for July rose to 3.2 – above the forecast from economists and marking an impressive rebound from a negative reading last month. Crude oil closed the week at $99.87 Friday, a six-week high.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks dropped 3.7 million barrels to 351.7 million barrels. Gasoline stocks rose 800,000 barrels to 212.5 million barrels. Gasoline demand for the past week was flat, up 12,000 barrels per day (bpd) t 9.028 million bpd. The four-week average for gasoline demand remained 2.2 percent behind the same time last year.
“Motorists filling up their tanks this week were faced with a double whammy – excessive heat and rising gas prices,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “As temperatures reached triple-digits in many areas, gas prices rose for the third straight week, a one-two punch as the summer driving season moves into its second half. Analysts continue to believe gas prices will remain below $4 per gallon in the near-term, barring any unforeseen natural or economic event, ranging from $3.50 to $3.75 over the next month.”
Oil prices may gain some clarity over the next few weeks as a number of issues start to be resolved. One of the first is the Greek debt crisis (a settlement was tentatively reach last week and proved to advance crude oil prices briefly above the $100/barrel mark.) The larger European sovereign debt issue remains, as well as resolution of the U.S. debt crisis, both of which will impact currency values and hence the price of oil. Also China used less crude oil in June than anytime in the past nine months but why this happened is the subject of some debate that may be clarified soon. China’s government has been raising interest rates to curb inflation and some argue this will lessen oil demand. Whether or not crude oil remains in its recent $90 to $100/barrel range remains to be seen, but some analysts believe only two things can knock the commodity out of this range – a hurricane headed to the U.S. Gulf Coast or August 2 comes and there’s no agreement on the U.S. debt ceiling.
Gas prices continue recent climb
Motorists had to dig a little deeper this week to fill up their tanks as gas prices rose for the second consecutive week, despite dropping more than 20 cents in the past eight weeks to the most recent low of $3.54 on June 30. The national average for regular grade gasoline rose to $3.67 Friday, up 8 cents from last week, yet 31 cents below their May 5 peak of $3.98/gallon. Three years ago this week gas prices reached an all-time record high of $4.11/gallon.
Economic worries hurt crude oil late-week following week-long volatility due to concerns about the U.S. deficit and Europe’s debt. After trading at over $98 a barrel mid-week on positive U.S. jobs and retail sales data, the commodity fell $2 Thursday following a warning from Moody’s Investors Service that it might strip the U.S. of its gold-plated credit rating if the $14.3 trillion limit on the country’s borrowing was not raised. S&P followed suite with a warning that it could cut the U.S.’s prized triple-A rating within the next 90 days if a deal is not struck. In addition to U.S. economic concerns, lingering worries about the euro zone’s debt crisis continued to keep investors cautious. Also this week, the Federal Reserve hinted more stimulus might be coming if the economy continues to weaken. Despite late-week losses, crude oil rose on Friday to close at $97.24, retaining a big portion of gains recouped after prices fell to four-month lows following the June 23 announcement from the International Energy Agency of a coordinate move to release 60 million barrels from members’ emergency reserves.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks dropped 3.1 million barrels to 355.5 million barrels. Gasoline stocks dropped 840,000 barrels to 211.7 million barrels. Gasoline demand fell 293,000 barrels per day (bpd) to 9.016 million (bpd), 140,000 bpd behind the same week last year.
“As the summer driving season approaches the mid-way point, motorists find themselves digging a little deeper when filling up at the pump as gas prices rose for the second straight week,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Yet prices remain 30 cents below the early-May peak and analysts caution (barring any unforeseen financial crisis or natural disaster) we are not headed to $4.00 per gallon gas prices this summer, but rather prices should remain below $3.75 per gallon through July and August.”
The EIA sees a deepening European debt crisis and slowing economic growth in China prompting reductions in forecasts for growth in global oil consumption. The top U.S. energy forecasting agency says it sees demand growing less than previously forecast this year and in 2012 due to a more moderate economic recovery and higher fuel prices. In its new monthly outlook, the EIA cut its forecast for 2011 world oil demand growth by 270,000 bpd to a 1.43 million bpd increase this year. Oil demand in 2012 will rise 1.58 million bpd, about 10,000 bpd lower than it forecast last month. OPEC also said world oil demand would grow more slowly in 2012 because of a fragile global economy and increased decline in consumption in Europe. The EIA expects regular-grade gasoline prices will average $3.62 per gallon and $3.51 per gallon over the third and fourth quarters of 2011.
AAA: Gas prices impact July 4th travel
Gas prices are predicted to deter some Virginians from traveling this July 4th holiday weekend with close to 1.1 million expected to celebrate Independence Day with a trip of 50 miles or more from home, a decrease of 2.4 percent (or just about 27,500 less) over last year’s holiday.
“The 2010 numbers represented a robust increase in the number of Virginian’s traveling for Fourth of July. This year’s holiday forecast remains strong despite the impact of sustained high gas prices,” said Martha Mitchell Meade, manager of public and government affairs for AAA Mid-Atlantic. “With current pump prices nearly one dollar more this year compared to last, fewer Virginians will be hitting the roads this year.
AAA continues to see strong resiliency among the traveling public as they head out year after year in mass to spend time enjoying holidays. However, “for the second holiday in a row, we are seeing a change in who is traveling with fewer traveling by car and many more traveling by air due to the impact of the recession and gas prices on those in the lower income brackets,” said Meade.
Automobile travel is expected to be down by 3.5 percent (943,000 forecasted auto travelers in Virginia), while air travel will rise by a whopping 21.5 percent or by nearly 15,400 people in spite of the fact that air fares are expected to be up about 11 percent over last year. Total airline passengers in Virginia are expected to reach close to 87,200.
“Although gas prices are impacting the average travel distance, median spending will actually be up this year due to the changing profile of the holiday traveler,” Meade said. “The average distance traveled by Americans during the Independence Day holiday weekend is expected to be 573 miles, 7 percent less than last year, yet median spending is expected to be $807, an increase of 25 percent from $644 last year.”
Gas prices continue downward trend
Gas prices continued their decline for the fourth consecutive week, dropping below the $3.70 mark as the summer driving season motors on.
The national average price of regular grade gasoline was $3.68 a gallon on Friday, down 4 cents from last week and down 25 cents in the last month, yet prices remain 97 cents higher than year ago prices and 43 cents below the all time high of $4.11 a gallon set nearly three years ago. The trigger for declining gas prices – crude oil – was also on the decline this week. The escalating Greek debt crisis, coupled with shrinking U.S. factory activity in the mid-Atlantic region (shrinking 7.7 percent to its lowest in two years, contrary to forecasts for a 6.8 percent rise) and strength in the dollar, sent crude oil prices downward for most of the week.
The commodity traded to an intra-day low of $91.12 Thursday before inching up to settle at $94.95. Analysts believe Greece will weigh into oil prices in the weeks ahead, contributing to the overall downward trend expected given recent negative economic data, both nationally and internationally. Crude oil settled at $93.01 Friday, down nearly 7 percent this week in the biggest fall since May. In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks fell 3.4 million barrels to 365.6 million barrels, a larger than expected drop.
Gasoline stocks rose 600,000 barrels to 215.1 million barrels. The latest EIA report also showed solid demand for gasoline. Last week’s gasoline demand numbers advanced 207,000 barrels per day (bpd) from the previous week to 9.37 million bpd. The four-week average is 0.5 percent above the same period in 2010, and the year-to-date tally is only 0.3 percent behind last year, even though prices have been about $1.00 per gallon higher.
“Prices at the pump rarely decline as rapidly as they increase, however, gas prices have steadily declined over the past four weeks just in time for the summer driving season,” said Martha M. Meade, manager of public and government affairs for AAA Mid-Atlantic. “Since peaking just shy of the $4.00 mark in early May, gas prices have dropped 30 cents per gallon. With the July Fourth holiday weekend just two weeks away, recent gas price declines are welcome news for motorists planning to take to the road.”
The International Energy Agency (IEA) notes in its mid-term report that higher demand and reduced spare OPEC capacity will leave oil markets under greater strain between now and 2012 than previously thought. It raised its five-year global oil demand forecast by an average of 700,000 bpd compared with the previous medium term report issued in December.
Gas prices stabilizing
Recent gas price declines, following near record-setting highs last month, were welcome news for motorists looking to kick off the official start of the summer driving season last weekend. While slight declines continued this week, gas prices stabilized in most areas in response to continued volatility in the crude oil market.
“Gas prices continue to be influenced by the crude oil market, as seen this week when prices at the pump stabilized somewhat following crude oil’s rise earlier in the week,” said Martha M. Meade, manager of public and government affairs for AAA Mid-Atlantic. “Yet despite recent volatility, analysts believe gas prices will continue to drop to within the $3.50 to $3.60 per gallon range by month’s end.”
The national average price of regular grade gasoline was $3.79 a gallon on Friday, down 2 cents from last week and down 19 cents in the last month, yet prices remain $1.07 higher than year ago prices. Although gasoline prices have dropped 19 cents since hitting this year’s high water mark of $3.98 a month ago on May 4th, the retail cost of gasoline, to the discomfiture of motorists, still remain at price levels not seen since July 2008.
In a shortened trading week, a weak U.S. dollar sent crude oil prices to a three-week high on Tuesday, above $103 per barrel. However, the release of disappointing economic reports mid-week – slumping housing, manufacturing and jobs data – sent crude oil down below the $100 mark. A downturn in economic growth could ultimately lead to a reduction in consumer spending, leading to lower fuel use.
On the international front, the fall in oil prices was tempered by continued unrest in the Middle East, with fighting in Yemen intensifying. Although Yemen is a small oil producer, it neighbors top oil exporter Saudi Arabia. Despite losses early in the day, crude oil closed at $100.22 Friday.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks rose 2.9 million barrels to 373.8 million barrels, well ahead of where they were at this time last year. Gasoline stocks rose 2.6 million barrels to 212.3 million barrels. The EIA also reported demand for gasoline was up 300,000 barrels to 9.431 million barrels per day (bpd).
Monthly income spent on gas skyrockets in April
With gas prices relentlessly near four dollars a gallon and inching toward record-shattering terrain, the average household in Virginia spent over twice as much – a staggering 131 percent increase – of their hard-earned income on gasoline purchases last month than they did just two years ago in April. Those shocking figures are revealed in a new study by the Oil Price Information Service (OPIS), which provides daily fuel price data to AAA.
From coast to coast, American motorists and consumers spent nearly double the cost to fuel their vehicles last month than they did just two years ago in April, the study reveals. It cost Americans $368.09 to purchase gasoline during April 2011, compared to just $174.80 during April 2009, according to the new data.
“With the pain at the pump becoming more excruciating, the average household spent nearly two hundred dollars more for gasoline this April than they did in April two years earlier,” said Martha M. Meade, AAA Mid-Atlantic’s manager of public and government affairs. “As a matter of fact, American families and households spent nearly ten percent of their monthly family budgets just to purchase gasoline during April. It’s proof that those motorists across the nation and Virginia are reeling from the agonizing financial burden of higher and higher pump prices.”
Motorists are shelling out a lot more money on fuel price and spending a greater percentage of their monthly budgets on gas. The pain at the pump, however, is not the same for everyone and every family, explains AAA Mid-Atlantic, which tracks fuel costs as a service to consumers and its members.
For example, Virginia residents have a greater fuel expense burden than Maryland residents although the cost of gasoline is generally cheaper in Virginia than it is in Maryland ($3.87 versus $3.97), explains AAA Mid-Atlantic. The average household in Virginia spent $422.83 on fuel purchases in April. When considered as a percentage of total income, Virginians spent 8.5 percent of the family budget on gasoline last month, the study shows.
In contrast, the monthly fuel price damage to household budgets in Maryland was lower than the national average. For instance, Maryland households spent an estimated $341.21 on fuel purchases during April. However, fuel costs accounted for less than six percent -5.9 percent – of the family income in Maryland last month.
In the District of Columbia – where 37 percent of the residents do not own an automobile (compared to ten percent in the United States) – the estimated cost of fuel per household was just $88.83 last month. All told, that reflects about 1.8 percent of the average monthly household budget in Washington, D.C. proper.
As a general rule, families and persons who live in higher-income areas tend to experience less of a bite from the soaring costs of gasoline, Meade explained. “But this time around, everyone is feeling the pain at the pump.”
Nationwide, it cost the average household in the United States an estimated $368.09 to purchase gas last month. That’s compared to $281.06 during the same month a year earlier on a national basis. For example, back in April 2009, Americans families spent an average of $173.80 on fuel purchases. Nationally, about 8.87 percent of the average household income was spent on fuel purchases, the study shows (the median household income in the United States is $49,777 annually).
In contrast, fuel purchases consumed 6.78 percent of average household budgets in April 2010, and just 4.10 percent of the average family monthly budgets in April 2009. The median household income in Virginia is $59,330 annually the study shows.
“Rising gasoline prices are having a tremendous impact on family incomes and household budgets,” said Meade. “In fact, the steady increase in pump prices is eroding the standard of living for some families and robbing them of their sense of economic well-being, and changing their shopping habits.”
Last month, motorists and consumers spent nearly $44-billion on motor fuel purchases (compared to an average range of $32-billion to $34- billion in April). That works out to $1.45-billion each day (compared with an expenditure of about $1.08-billion per day one year ago), Meade explained.
Gas prices continue push upward
The national average for a gallon of regular unleaded gasoline was at $3.85 on Friday, up three cents from a week ago, 30 cents from a month ago and 99 cents higher than a year ago.
The price at the pump has gone up 78 cents since the beginning of 2011. The push upward this week came from increases in trading in crude-oil, which was at $112.29 a barrel on Thursday, up 2.4 percent on the week.
“Easter weekend is here and Memorial Day weekend is just five weeks away, which has motorists wondering just how high will gas prices climb before the unofficial start of summer arrives,” said Martha M. Meade, manager of public and government affairs for AAA Mid-Atlantic. “The (crude oil) market’s momentum makes it impossible to rule out $4.00 a gallon gasoline by Memorial Day, despite some analysts’ predictions to the contrary, however we remain cautiously optimistic that we’ll see some gas price stability in the coming weeks.”
In its weekly report, the U.S. Energy Information Administration data showed crude stocks fell unexpectedly by 2.3 million barrels to 357.0 million barrels, compared to analysts’ expectations for a 1.1 million barrel build. Gasoline stocks fell for the ninth straight week by 1.6 million barrels to 208.1 million barrels, which was in line with expectations. Nationwide demand sagged 119,000 barrels per day (BPD) to 9.062 million barrels, 1.8 percent lower compared to the same week a year ago.
Gas prices creeping toward $4 a gallon
The national average price of a gallon of regular unleaded was at $3.83 a gallon as of Monday morning, up six cents from a week ago and 97 cents over the past year.
That’s the bad news. The sort of good news: Don’t expect prices to stay at this level for too long.
“Should prices continue their upward tick, demand would undoubtedly be affected, theoretically reversing the price of crude oil and gasoline,” said Martha M. Meade, director of public and government affairs for AAA Mid-Atlantic.
Crude oil hit their highest levels in more than two and a half years early this week, trading above $113 a barrel, before dropping below $106 a barrel Tuesday. Despite continued unrest in the Middle East and North Africa, analysts believe this week’s price dip could be a delayed reaction to softer demand and speculators sensing the end of the bullish run.
In addition, as markets adjust to turmoil in Libya and supply disruptions, focus returned to weakness in the U.S. dollar and better-than-forecast consumer confidence, both aiding crude oil’s bounce back following a tumble early in the week.
In all, crude oil prices dipped 3 percent last week to close at $109.66 Friday.
In its weekly report, the U.S. Energy Information Administration data showed crude stocks rose 1.6 million barrels to 359.3 million barrels. Gasoline stocks fell 7 million barrels to 209.7 million barrels.
“With Memorial Day weekend just six weeks away, motorists and analysts alike will continue to eyeball the direction of crude oil markets and gas prices looking for any signs of an about face,” Meade said.
SDHS student wins AAA poster contest
A poster created by Dylan Bozic, a student of Stuarts Draft High School, has been recognized by AAA Mid-Atlantic for earning first place in its Annual Traffic Safety Poster Contest.
Dylan was awarded first place in the High School (9-12) division covering the subject of Teen Driving. Dylan’s artwork was selected by AAA Mid-Atlantic from among nearly 1,400 entries. A panel of traffic safety experts judged the entries based on originality, technique, visual impact and relationship of messaging to traffic safety. His entry was selected from among hundreds of high school submissions.
“Dylan’s poster not only showcased his artistic talents, but also helped spread an important message about teen driving safety,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Motor vehicle-related crashes continue to be the number one cause of death for children over age 2, and we hope entries such as Dylan’s will help students’ share the importance of traffic safety with their peers.”
The Annual Traffic Safety Poster Contest aims to reduce traffic related fatalities through education and community outreach. Each year, students design posters and public service announcements using traffic safety slogans selected by AAA. Entrants are grouped according to grade: K-2, 3-5, 6-8 and 9-12. First place winners are awarded a $500 Visa Gift Card; second place winners receive a $250 Visa Gift Card; third place winners are given a $100 Visa Gift Card; and those receiving an honorable mention get movie tickets and a AAA Atlas.
Gas prices stabilizing
Prices at the gas pump have seen some stability after a tumultuous past few weeks, though at levels that are still uncomfortable for most.
The national average price of regular grade gasoline was $3.56 Friday, up two cents from a week ago, 37 cents higher than month ago prices and 75 cents higher than year ago prices. Gas prices remain 55 cents below the all-time high of $4.11 a gallon set back in July 2008.
Despite a drop below the $100 mark for two trading session last week, crude oil began the week above the $100 a barrel mark for the third consecutive week following air strikes by U.S. and allied forces in Libya last weekend at the order of the U.N. Security Council. Prices jumped $2 a barrel late last Sunday and reached a two and a half year high Wednesday ($105.75) due to a combination of a weaker U.S. dollar, a stronger stock market and fears of extended conflict in Libya.
Trading remained volatile as investors awaited the next turn of events in the Middle East and North Africa, as well as new developments surrounding Japan’s nuclear crisis. Crude oil settled at $105.40 a barrel Friday. Since mid-February, crude oil has surged more than 20 percent.
In its weekly report, the U.S. Energy Information Administration data showed crude stocks rose 2.1 million barrels to 352.8 million barrels. Gasoline stocks fell by 5.3 million barrels to 219.7 million barrels, some 5 million barrels below a year ago, putting inventories 762,000 barrels below the five year average (just seven months ago gasoline stocks showed a 26.3 million barrel surplus to the five year average). The EIA also noted demand rose 244,000 barrels per day (bpd) to 9.074 million bpd.
“Gas prices have been relatively flat for the past two weeks, in stark contrast to crude oil, which continues to react to daily developments in the Middle East, North Africa and Japan,” said Martha M. Meade, manager of public and government affairs for AAA Mid-Atlantic. “Continued volatility has made it difficult to forecast where gas prices will go in the short term, but if the crude oil market is any indication, we’re likely to see gas prices continue the upward trend that began one month ago. Analysts believe gas prices will reach $3.75 a gallon in April, the typical start of the peak driving season.”
Gas prices stabilizing
Have gas prices hit their peak? It’s too early to tell, but a month of consistent increases came to at least a brief end after the average national cost of a gallon of regular unleaded hit a recent high of $3.56 a gallon on March 16.
The national average is at $3.54 a gallon this morning as crude-oil prices have continued to stabilize themselves in the wake of the natural disasters in Japan that have impacted that nation’s economic output and thus demand for oil supplies in the short term.
Continued unrest in the Middle East heightened by UN Coalition forces taking action in Libya over the weekend are acting as a counterbalance on the crude-oil market. A barrel of oil is trading at $103 at the opening of trading Monday morning.
“While no one is ready to call this week’s stability at the gas pumps a trend, the recent slowing and even declines in some areas is welcome news for motorists,” Martha M Meade, manager of public and government affairs for AAA Mid-Atlantic. “Given the uncertainty in the crude oil market following continued unrest in the Middle East and North Africa, and last week’s 9.0 magnitude earthquake in Japan, it’s too soon to tell what the short or long term effects will be on gas prices.”
Story by Chris Graham. Chris can be reached at freepress2@ntelos.net.
