AAA: Gas prices at 10-month low

Gas prices remain stable two weeks ahead of the year-end holiday travel period, which is welcome news for cash-strapped motorists juggling holiday shopping and travel plans in the coming weeks.

U.S. gasoline prices today are lower than they have been since day 10 of the Libyan civil war (Feb. 24, 2011). The national average for regular grade gasoline remained unchanged over last week at $3.29 per gallon Friday.  Prices are 14 cents below month ago prices and 31 cents above year-ago prices, yet 82 cents below the all-time high of $4.11 per gallon set in July 2008.

In fact, in a strange statistical coincidence, the year-on-year premium for motor fuel has slipped to its smallest increment since Dec. 6, 2010. Gasoline today costs 32.41cts/gal more than it did on this day last year, and on this day last year, gasoline cost 31.8cts/gal more than it fetched on December 6, 2009.

Crude oil spent seven consecutive days trading above the $100 per barrel mark before reversing its upward climb below the triple-digit threshold by week’s end.  After trading as high as $102 per barrel, the commodity dropped to $98 Thursday, taking aim at its biggest weekly decline since September.  Read more

AAA: Gas prices might be on decline through end of year

Despite reaching the highest level ever for a Thanksgiving holiday weekend (averaging $3.31), gas prices continue their decline that began in mid-October and will likely continue in the week ahead, if not through the remainder of the year. Thenational average for regular grade gasoline dropped 2 cents this week to $3.29 Friday.  Prices are 14 cents below month ago prices and 41 cents above year-ago prices, yet 82 cents below the all-time high of $4.11 per gallon set over three year ago.

Crude oil began the month of December above the $100 per barrel mark for just the third time since June.  One contributing factor to oil’s advance – U.S. retail sales jumped to a record $52.4 billion during the Thanksgiving holiday weekend, a signal of economic growth in the world’s biggest crude-consuming country.  There was also optimism that European countries are participating in discussions to fortify the tenuous sovereign debt situation in the euro zone as a reason for optimism that, rather than split apart, the European Union (EU) may be moving to strengthen ties.  In addition, concern for tension betweenIran and European governments will disrupt oil exports from theMiddle East supported crude oil’s rise.  By week’s end crude oil dipped slightly, but not below $100, following signs of economic slowdown in Europe, a weaker factory sector inChina and new applications for unemployment in theU.S. rose for the second straight week, their highest level since late October.  Yet the commodity saw its first weekly gain in three weeks, closing at $100.96 Friday.

The U.S. Energy Information Administration’s (EIA) weekly report showed crude stocks rose 3.9 million barrels to 334.7 million barrels.  Gasoline stocks rose 213,000 barrels to 209.8 million barrels.  Petroleum demand continues to be poor at 17.946 million barrels per day (bpd), the poorest week for demand since June 19, 2009, when theU.S. economy was in the thick of the Great Recession.  More important, prior to the June 2009 dip, this week marks the first time since September 2001 demand has been so feeble.  Gasoline demand saw a slight upswing, rising 177,000 bpd last week, leading some to believe year-on-year deficits may be smaller than the 4 percent declines seen recently.

“Pump prices continue to decline, despite recent crude oil increases, which is welcome news for motorists who paid the highest prices ever for gasoline during the month of November,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “As the year-end holidays approach, motorists wonder if the downward trend will continue and the good news, according to analysts, is gas prices will continue to level off in the coming weeks before reaching a price bottom at some point during the winter when demand is typically low.”

The last 35 days of 2011 might get close to the performance of the first 35 days when gasoline prices were barely above $3.00 per gallon, according to Tom Kloza, chief oil analysts for OPIS.  Kloza also suggests gas prices will average $3.25 per gallon through year’s end.  Somewhere between Black Friday and Ground Hog Day prices will bottom out, with January as the likely month for the price bottom, which will become the launch pad for a spring rally that could potentially add another $1.00 to wherever the bottom occurs.

Surprise! Gas prices dropping heading into holiday travel weekend

Although gas prices are at their highest level ever for this time of year, prices at the pump dropped slightly this week as they have for the past few weeks, bringing relief to many who are preparing to take to the roads for the upcoming Thanksgiving holiday weekend. Thenational average for regular grade gasoline dropped 6 cents this week to $3.38 Friday.  Prices are 9 cents above month ago prices and 49 cents above year-ago prices, yet 73 cents below the all-time high of $4.11 per gallon set in the summer of 2008.

Crude oil soared above $100 per barrel Wednesday for the first time ever in November (and the first time since early June), yet gas prices are dropping at the pump.  Up 30 percent since early October, crude oil jumped on Wednesdayfollowing news of a pipeline reversal in the Midwest that will ease a glut of crude around the Cushing,Oklahoma delivery point.  However, concerns for the European economic outlook leading to further demand destruction caused prices to tumble 4 percent Thursday in the biggest one-day percentage loss since September 28, leading many analysts to believe crude will continue to fall in the coming week due to continued euro zone debt concerns.  Crude oil rebounded slightly Friday as the euro gained strength against the dollar, a sign the struggling European economy could possible be stabilizing.  Although crude crossed the $100 per barrel threshold mid-week, it closed the week at $97.67 per barrel, its worst weekly performance since late September.  Might recent crude oil increases drive gas prices higher in coming weeks?  Perhaps yes, however, despite increases in the commodity price throughout the past two weeks, gas prices have declined steadily.

The U.S. Energy Information Administration’s (EIA) weekly report showed crude stocks fell by 1.1 million barrels to 337 million barrels.  Gasoline stocks rose 1 million barrels to 205.2 million barrels.  Gasoline demand continues to be very poor, dropping 46,000 barrels per day (bpd) to 8.625 million bpd, due to high gas prices and a weak economy.

“Despite gas prices at their highest level ever for the month of November, prices at the pumps have leveled off and even dropped slightly this week, which is welcome news to the millions of Americans who will take to the roads in the coming days for the Thanksgiving holiday,” said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic.  “Although economic concerns continue to influence financial decisions for many Americans, that’s not stopping many from gassing up to travel to be with family and friends next weekend.  What can motorists expect to pay at the pump throughout the holiday season?  Analysts believe gas prices will drop slightly through the remainder of the year.”

AAA forecasts 42.5 million Americans will travel 50 miles or more from home during the Thanksgiving holiday weekend, a four percent increase from the 40.9 million people who traveled one year ago. This is the first significant increase in any holiday travel this year.Despite potentially seeing the highest ever retail gas prices at Thanksgiving, approximately 38.2 million people (90 percent of holiday travelers) plan to take to the nation’s roadways this Thanksgiving holiday weekend, a four percent increase compared to 2010 when auto travelers totaled 36.8 million. Automobile travel remains the preferred choice of transportation for holiday travelers as it is often more affordable, convenient and flexible.

Gas prices inching upward heading into Thanksgiving

Gas prices are at their highest level ever for this time of year, a time when prices at the pump typically fall.  Just two weeks out from the Thanksgiving holiday, motorists are left wondering what will happen to gas prices leading up to the busiest travel holiday of the year. Thenational average for regular grade gasoline gained 2 cents this week to $3.44 Friday.  Prices are 3 cents above month ago prices and 58 cents above year-ago prices, yet 67 cents below the all-time high of $4.11 per gallon set in July 2008.  Analysts believe gas prices will remain above $3.40 per gallon through Thanksgiving and decline, albeit slightly, through the end of the year.

American households are spending 8 percent of their income on gasoline and the nation is on track to have the highest fuel bill ever, based on statistics just compiled by OPIS Retail Group.  There is a consolation prize: The estimated monthly household cost for buying gasoline did drop in October by 3.5 percent to $332.40, thanks to a decline in retail pump prices to a national average of $3.44 per gallon, the lowest since February.  Still, when compared to last year household fuel bills are $50 per month higher.  Moreover, American’s are on track to cough up a record $490 billion for gasoline in 2011.  That would top 2008′s fuel bill of $448 billion.  Last year’s tally was around $390 billion, so the current pace of spending would exceed last year by $100 billion or 25 percent.  Year-to-date Americans have spent 8.4 percent of their income on gasoline, up from 6.7 percent last year and on track surpass the 7.9 percent number hit in 2008.

Crude oil remained volatile again this week, reacting to national and international economic news.  New claims for unemployment benefits in the U.S. fell last week to their lowest level since early April and the trade deficit unexpectedly shrank in September, both indicators of a recovering economy that will ultimately boost fuel demand.  Progress in Italy’s efforts to resolve its debt problems, in addition to leadership changes in bothItaly and Greece, have demonstrated Europe’s willingness to take the necessary steps to contain the region’s debt crisis.  The commodity closed at a 15-week high Thursday of $97.78 and continued gains Friday to close the week at $98.99, marking its sixth consecutive weekly gain and a nearly 30 percent increase since early October when crude was $75 per barrel.  Some analysts believe crude oil will cross the $100 per barrel threshold in the not too distant future.  In 2008, crude jumped to a record high of $147 per barrel.

The U.S. Energy Information Administration’s weekly report showed crude stocks fell by 1.4 million barrels to 338.1 million barrels.  Gasoline stocks dropped 2.1 million barrels to 204.2 million barrels.  Gasoline demand remained poor, at 8.671 million barrels per day (bpd), despite a 175,000 bpd increase over last week.

“Thanksgiving is less than two weeks away and with most holiday travelers planning to take to the road to get to their holiday destinations, many are left wondering how much higher gas prices will creep at a time of year when they are typically on the decline,” said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic.  “Gas prices have been anything but typical this year, which leaves motorists extremely skeptical when it comes to price trends.  Although most motorists will unlikely alter their travel plans for the Thanksgiving holiday, they will undoubtedly be asking themselves why prices are on the rise and how long the trend will continue.  This remains to be seen, although some analysts believe prices will remain steady or even slightly lower through the end of the year before climbing into potentially record-high territory next spring and summer.”

Atypically high gas prices for this time of year have left motorists wondering what is in store in the coming months and into next year.  Despite projections for slight declines in prices through the end of the year, crude oil volatility and potential demand resurgence due to positive economic indicators could send gas prices well above the 2008 record high of $4.11, perhaps as high as $4.25 to $4.50 per gallon.

Positive economic news could boost gas prices

Despite a roller-coaster week for crude oil, gas prices remained relatively steady this week, even dropping a few pennies in some areas.  The national average for regular grade gasoline dropped 2 cents this week to $3.45 Friday.  Prices remain 2 cents below month ago prices.  Prices remain 64 cents higher than year ago prices, yet 66 cents below the all-time high of $4.11 per gallon set in July 2008.

Crude oil crossed over the $90 per barrel threshold on Monday for the first time since mid-September.  The commodity continued to trade in the $90 to $95 range throughout the week, including a rally of more than 4 percent on Thursday upon news of a deal to resolve the Greek debt and euro zone debt crisis.  Additional support for crude oil came from data showing the U.S. gross domestic product grew at its fastest pace of the year in the third quarter, easing some investor concern that the U.S. would lapse into another recession.  Also supporting crude oil this week was a stronger U.S. dollar, which makes commodities prices in dollars more expensive for holders of other currencies.  Despite a slight dip in price on Friday, crude oil saw weekly gains for the fourth straight week, closing at $93.32 Friday.

The U.S. Energy Information Administration’s weekly report showed crude stocks rebounded from several weeks of declines, rising 4.7 million, to 337.6 million barrels.  Gasoline stocks dropped 1.4 million barrels to 204.9 million barrels.  Over the last few years gasoline stocks typically bottom out in late October or early November before rebounding.  Gasoline demand over the past four weeks dropped to 8.501 million barrels per day (bpd), a level reached a few times this year, but to find demand number below 8.5 million bpd one would have to go back to January 2004.  Compared to the same week last year, demand is off by 9 percent.

“With positive economic news at home and abroad, confidence is slowly being restored in the global economy, abating fears of a double-dip recession,” said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic.  “Although analysts believe gas prices will average about $3.40 per gallon through Thanksgiving, continued economic progress and strength in the crude oil markets in the last two months of the year would result in gas prices creeping upward to mimic commodity market growth.”

Motorists have been subjected to a rollercoaster ride of prices in recent weeks.  What should we expect in the weeks and months ahead? Some analysts believe motorists will see gas prices remain lower in the short term, averaging $3.40 per gallon through Thanksgiving.  However, they also see another vicious winter-spring rally ahead that could send gas prices as high as $4.25 per gallon in early 2012.

Gas prices inch upward for second straight week

Earlier this month gas prices were falling at about 1-cent per day and were expected to continue their decline through the autumn and early winter months.  However, over the past two weeks prices at the pump have shifted gears, rising at the rate of about 1-cent per day or even more in some areas.  In the last week, the national average for regular grade gasoline rose 3 cents to $3.47 Friday, yet prices are 10 cents below month ago prices.  Prices remain 64 cents higher than year ago prices, yet 64 cents below the all-time high of $4.11 per gallon set in July 2008.

Crude oil continued to trade in the $80 to $90 range throughout the week, inching upward early on in the week, then pulling back Wednesday and Thursday.  Affecting the commodity this week – France and Germany have assured the markets that European leaders will present a comprehensive solution to the euro zone debt crisis at a summit this weekend and next week.  Also, U.S. economic data remains weak (indicating less demand for fuel), however, the Federal Reserve showed a slight increase in consumer spending in September.  Lastly, the demise of former Libyan leader Moammar Gadhafi will speed up Libya’s oil industry, which has already ramped up to 430,000 barrels per day after being off line for most of the spring and summer months.  Analysts believe crude oil will continue to be range bound between $85 to $90 range in the short term, barring any significant national or international news event that would move the needle in either direction.  Crude closed the week at $87.40.

The U.S. Energy Information Administration’s (EIA) weekly report showed crude stocks fell sharply by 4.7 million barrels, to 332.9 million barrels.  Gasoline stocks dropped 3.3 million barrels to 206.3 million barrels.  Gasoline demand over the past four weeks was 8.598 million barrels, the lowest level since early February and 1.5 percent behind the same time last year.

“For the second straight week, motorists continue to feel price hikes at the pumps,” said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic.  “Economic fears, nationally and internationally, have fueled the recent rise in crude oil prices, which ultimately leads to gas price increases.  Gas prices could buck typical downward seasonal trends with an autumn and early winter upswing, rather than previously forecast declines.”

Motorists will likely continue to feel the pinch at the pump in the week ahead, barring any unforeseen circumstance that would tumble crude oil prices or affect demand, as gas prices continue to inch upward.  As crude oil tests the $85 to $90 per barrel range, gas prices will likely break through the $3.50 per gallon mark in the coming week and potentially beyond.