Gas prices inch upward
After four consecutive weeks of declines, gas prices reversed the trend, edging up yet again. In the last week, the national average for regular grade gasoline rose 5 cents to $3.44 Friday, yet prices are 19 cents below month ago prices. Prices remain 61 cents higher than year ago prices, yet 67 cents below the all-time high of $4.11 per gallon set three summers ago.
An upward crude oil trend sent prices above the $86 per barrel mark by mid-week came, due in part to a weakened U.S. dollar. A strengthened U.S. dollar and positive jobs data later in the week trumped crude inventory data and unraveled the commodity’s upward trend, sending prices down 1.6 percent Thursday to the lowest close since October 7. Though crude bounced back Friday on speculation Europe may be able to contain its debt crisis and that the U.S. economy will slowly begin to recover (increasing demand). At Friday’s close, crude oil settled at $86.80 for its second straight weekly gain.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks rose 1.3 million barrels, to 337.6 million barrels (a third straight increase and a 6.4 percent below year-ago levels). Gasoline stocks fell 4.1 million barrels to 209.6 million barrels (down 1.9 percent). Gasoline demand over the past four weeks was 0.7 percent lower than a year ago, averaging 8.9 million barrels a day.
“After several weeks of relief at the pump, motorists are now faced with the reality of a reversal of trend,” said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic. “Gas prices mirrored crude oil increases this week, ending a 4-week run of gas price declines. Motorists may want to fill up their tanks this weekend, as some analysts suggest gas prices will rise gradually over the next week or two, some rising as much as 10 cents by Halloween.”
As crude oil prices increase, so do gas prices. How long will they rise and how high will they do remain uncertain, however, analysts believe that as crude oil settles back in the $80 to $90-per barrel range gas prices will follow suit, crossing back over the threshold of $3.50 per gallon nationally and potentially increasing as much as 10 cents per gallon by Halloween.
More good news: Gas prices continue downward trend
Gas prices continued their downward trend for the fourth consecutive week, which has been welcome news for cash-strapped motorists. The national average for regular grade gasoline dropped to $3.39 Friday, down 6 cents in the past week and down 27 cents in the past month. Prices remain 62 cents higher than year ago prices, yet 72 cents below the all-time high of $4.11 per gallon set in July 2008.
Crude oil rallied for three days of solid gains this week, reacting to shrinking supplies, better-than-expected economic data, a weakened U.S. dollar and signs Europe can control its debt crisis – all factors thwarting fears that demand will suffer. Despite gains this week, crude oil settled at $75.67 on Wednesday, its lowest settlement in over a year (September 23, 2010) and in the past month the commodity is down more than 15 percent. Employment data released Friday showed more jobs were created in September (103,000), not enough to send the unemployment rate below 9 percent, but perhaps enough to ease some concerns of an economic recession. After spending the majority of the week below the $80/barrel mark, crude oil closed the week up 5 percent at $82.98 Friday, its first weekly gain in three weeks.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks dropped 4.7 million barrels, to 336.3 million barrels (lowest level since January). Gasoline stocks fell 1.1 million barrels to 213.7 million barrels. The EIA also noted total petroleum demand levels were relatively flat, with the four-week average for all products running 1.3 percent below the same period last year.
“Prices at the pump continue their downward trend, bringing much needed relief to cash-strapped motorists,” said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic. “Gas prices have dropped to seven-month lows in recent weeks and although prices are not ‘low’ by any means, they have dropped almost 60 cents a gallon since peaking at $3.98 back in May of this year. A 60-cent drop in gas prices translates to an annual household savings of $748.”
Although gas prices continue to fall, which is welcome news to motorists who have undoubtedly felt the pressure from rising prices and a poor economic climate, the drop is not cause for celebration. Crude oil, which makes up almost 70 percent of gasoline prices, has declined because investors are worried the global economy and demand for crude oil are headed for a slowdown. Should the economy avoid a recession, analysts believe gas prices could rebound next year.
AAA: Gas prices continue dip
Gas prices across the country continued to decline, an upside of recent domestic and international economic worries, sending the national average price below the $3.50 per gallon mark for the first time in seven months. The national average for regular grade gasoline dropped to $3.45 Friday, down 9 cents in the past week and down 17 cents in the past month. Prices remain 76 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 rebounded somewhat early this week, following last week’s dramatic declines. Contributing to the commodity’s slight upswing this week – U.S. weekly jobless benefits claims fell to a five-month low, a weakened U.S. dollar and German lawmakers approved a euro zone bailout fund. However, crude oil could not sustain its upward momentum and slumped more than 3 percent on Friday following weak economic indicators fromChina, ongoing concerns about Europe’s debt problems and a stronger dollar. Crude oil prices have dropped sharply this quarter on fears of aU.S. recession and concern thatEurope’s debt crisis will spread and damage the global economy further, ultimately hindering demand growth. U.S. crude has fallen nearly 14 percent this quarter, the sharpest drop since the last quarter of 2008. Crude oil closed the week at $79.20.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks rose 1.9 million barrels, to 341 million barrels. Gasoline stocks rose 800,000 barrels to 214.9 million barrels. The EIA also reported revised data showingU.S. oil demand in July fell by 4% from a year earlier to 18.555 million barrels a day and was the lowest level for the month since 1996. The drop came as gasoline demand fell 3.7% to 8.96 million barrels a day, the lowest level since 2000. Revised total demand for July, typically the peak month of the summer driving season, was 2.3 percent below the earlier estimate, with demand for gasoline, the most widely used petroleum product, 1.3 percent lower than preliminary data showed.
“Not since March of this year have we seen the national average gas price below $3.50 per gallon,” said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic. “Now that crude oil has settled in the $80 range, down from a three-year high this spring ($113.93 on April 29), gas prices are shifting downward as well, bringing much needed relief for cash-strapped motorists. American consumers are spending about $1.3 billion a day on their fuel purchases. Back on May 5 when retail gasoline prices peaked at 3.98 per gallon, we were forking over $1.51 billion a day. That’s a drop of $200 million per day, but it is still nearly $400 million more per day than we were backing on January 3, when pump prices were at their lowest price of the year – averaging $3.07 a gallon.” Analysts believe the recent drop in prices will likely last through the fall, but caution that what we see now won’t be the ‘new normal,’ but rather a starting point for winter and spring prices.”
How much lower will gas prices go? Some analysts believe the national average price could flirt with $3.00 per gallon by the end of this quarter, however, they caution that gas prices will likely rebound in early 2012. Although prices have declined in the past month, they aren’t exactly low. Gas prices are up 28 percent from a year ago and estimates showU.S. motorists are spending about $1.3 billion every day at the pump, putting the country in track to spend almost $490 billion on gas this year – the most in history.
Gas prices continue recent decline
Gas prices continued to decline for the second straight week, due to a combination of restored production, the switch to less-expensive autumn/winter blended gasoline and lower crude oil prices. The national average for regular grade gasoline dropped to $3.54 Friday, down 7 cents in the past week and down 4 cents in the past month. Prices remain 82 cents higher than year ago prices, yet 57 cents below the all-time high of $4.11 per gallon set in July 2008.
Crude oil dropped to its lowest level in six weeks following the Federal Reserve noting a bleak economic outlook and a warning of “significant downside risks,” followed by the Fed replacing $400 billion in short-term debt and long-term Treasuries in an attempt to spur growth. Also contributing to crude oil’s decline were recession fears around the world due to Chinese economic contraction and worries about stability in the Eurozone. A global recession would significantly affect crude oil demand, especially in theU.S., the world’s largest crude oil consumer. A strengthening U.S. dollar also fueled the commodity’s decline this week. As the financial climate overseas becomes more uncertain, U.S. dollars become a more attractive investment, driving up the value of the dollar. Commodities – including crude oil – are traded in U.S. dollars, and as the dollar strengthens relative to currencies abroad, the effective price of these products for those outside of the U.S. becomes more expensive. Oil futures become a less attractive investment and prices are pressured downward. Crude oil closed the week at $79.85, down more than 9 percent.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks dropped 7.3 million barrels, to 339 million barrels. Gasoline stocks rose 3.3 million barrels to 214.1 million barrels. Gasoline demand measured at 8.858 million barrels per day (bpd), up 10,000 bpd from last week and slightly above the 2010 pace. Most analysts believe demand is probably running about 2 percent behind last year, but they stress it has stabilized after a late-August plunge.
“Relief at the gas pump continues for motorists as crude oil prices drop and the change over to the less-expensive autumn/winter blended gasoline begins, helping to push gas prices lower,” said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic. “Wholesale gas prices have dropped 40 cents a gallon since September 1, which also bodes well for consumers.” How much longer will prices drop and how much lower will they go? Analysts believe gas prices will continue to fall in the coming weeks, into the $3.30 to $3.50 per gallon range, bringing even more relief to cash-strapped motorists. Also of note, thefederal tax on gasoline, which is 18.4 cent a gallon, is expiring next week, on September 30. Motorists won’t see or save a penny of that, though. If it expires, it could jeopardize the federal government’s ability to reimburse the states for projects already under way.”
Prices at the pump have fallen in recent weeks and some analysts believe the trend is expected to continue into the fall, dropping to $3.30 to $3.50 per gallon nationally. A drop in gas prices is typical for the last 100 days of the year as demand diminishes slightly. However, as winter 2012 approaches, analysts warn of strong updrafts for crude oil and, in turn, gasoline. Continuing concerns in the Middle East and North Africa, coupled with the potential for tighter oil supplies due to global economic growth could send gas prices knocking on $4 per gallon by spring 2012.
Gas prices recede
After two consecutive weeks on the rise, gas prices dropped slightly this week as production and refining capacities were restored following tropical storm activity in recent weeks. The national average for regular grade gasoline dropped 5 cents this week to $3.61 per gallon Friday. Prices remain 3 cents higher than month ago prices and 88 cents higher than year ago prices, yet they hold 50 cents below the all-time high of $4.11 per gallon set in July 2008.
Crude oil gained nearly 3 percent early this week, its fourth straight weekly gain and its longest winning streak since July, as prices inched ever-closer to the $90 per barrel mark. Action to contain Europe’s debt crisis (easing concern about falling oil demand) and weakness in the U.S dollar contributed to the commodity’s steady growth this week. U.S. economic news was mixed. New claims for U.S. jobless aid rose unexpectedly last week and factory activity along much of the Eastern seaboard contracted early this month, bolstering the case for more action to support the struggling economy. To the contrary, U.S. consumer price inflation picked up in August at a faster pace than economists were expecting and the consumer price index rose 0.4 percent in August, according to the Labor Department. PositiveU.S. economic news, coupled by potential additional government stimulus efforts, will likelyincrease demand for crude oil and ultimately gasoline. Crude oil closed the week at $87.96.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks fell 6.7 million barrels, to 346.4 million barrels, primarily due to the shut down of platforms in the Gulf of Mexico due to Tropical Storm Lee. Gasoline stocks rose 1.9 million barrels to 210.8 million barrels. Gasoline demand measured at 8.848 million barrels per day (bpd) and total petroleum demand measured at 18.654 million bpd, down 732,000 bpd and 562,000 bpd behind last year. TotalU.S. petroleum demand on a four-week basis last slipped below 19 million bpd in July (a slip that was short-lived).
“Motorists found some much-needed relief at the gas pump this week asU.S. oil and natural gas production in theGulf of Mexico was restored post-Tropical Storm Lee, sending gas prices downward for the first time in almost three weeks” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “In addition, the change over from summer blended gasoline to less-expensive autumn/winter blended gasoline began this week, which will likely bring even more relief for motorists who have been grappling with high gas prices throughout the summer months.”
The switch from summer blended gasoline to the less-expensive autumn/winter blended gasoline began this week. The transition typically results in lower prices at the pump for motorists. However, should crude oil prices continue to increase, relief at the pump from the switch to autumn/winter blends could be muted. Relief or not, some analysts believe we may be witnessing the most expensive last four months of any year for gasoline, noting that U.S. consumers are on course to spend about $540 billion on gasoline this year – about $50 billion above the previous record.
Gas prices inching back up
Prices at the pump continued to rise for the second straight week, impacted by hurricanes and economic factors. The national average for regular grade gasoline held steady for most of the week at $3.66 per gallon, up a penny in the last week and up 4 cents in the last month. Prices remain 98 cents higher than year-ago prices and 45 cents below the all-time high of $4.11 per gallon set three summers ago in July 2008.
Crude oil briefly breached the $90 per barrel mark mid-week for the first time in a few weeks, reaching a 5-week high. However, trading was unable to sustain the benchmark and the commodity dropped back below $90 per barrel for the remainder of the week. Oil retreated further Friday (nearly 2 percent), following gloomy economic prospects, weak U.S. supply and strength in the U.S. dollar following a drop in the euro to a six-month low (oil, priced in dollars, falls as the U.S. dollar strengthens as it becomes less affordable for holders of foreign currencies). On Thursday President Barack Obama proposed $447 billion package of tax cuts and spending plans aimed at boosting growth and job creation, however, the announced plan failed to restore confidence to jittery markets. Crude oil closed the shortened trading week at $87.24.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks fell 4 million barrels, to 353.1 million barrels. Gasoline stocks fell 200,000 barrels to 208.8 million barrels. Gasoline demand fell to 8.956 million barrels per day (bpd) last week and the four-week demand number of 9.097 million bpd compares with 9.371 million bpd a year ago, a drop of just under 3 percent. The EIA also revised its short-term energy outlook, noting gas prices should fall to about $3.47 per gallon in the fourth quarter of 2011, mainly due to the switch from summer to autumn/winter blended gasoline. Over all the EIA expects an average of $3.56 per gallon for the year and $3.54 per gallon for 2012.
“Motorists looking for relief at the gas pump will have to wait out the continued effects of Hurricane Irene and Tropical Storm Lee, both of which shut down U.S. oil and natural gas production,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Despite somewhat lower crude oil prices, such storms have kept upward pressure on gas prices. Although good news for motorists should come in the weeks ahead as the change over from summer blended gasoline to the less-expensive winter blended gasoline begins, which typically translates to lower prices at the pump.”
According to experts at weather forecasting firm Weather Underground, a typical hurricane season has 10 or 11 named storms. Halfway through the 2011 season (which extends through November), Katia marked this year’s eleventh such storm and last week Nate became the fourteenth named storm. At the current rate of storm development, we are on pace to have 25 named storms this year. This would mark the busiest season since 2005, which was the most active in recorded history and included Hurricanes Katrina, Rita, and Wilma.
Gas prices peaking?
Hurricane Irene has come and gone and American drivers are saying “good riddance.” The Labor Day holiday weekend marks the official end of summer vacation and driving season and the transition to winter gasoline blends., which could have an impact on gasoline prices this fall. This weekend,approximately 27.3 million Americans, including 776,900 Virginia residents, plan to travel to their holiday destination by automobile, AAA Mid-Atlantic is projecting. As they go, they will face a stiff headwind at the gas kiosk. For the first time in four weeks,average retail prices rose nationwide.Nationally, the price at the pump peaked at $3.98 per gallon on May 5. It is down to $3.65 at the start of the Labor Day weekend, according toAAA’s Daily Fuel Gauge Report.
Thesummer weekly gasoline peak price may be behind us,but we are still paying nearly a dollar more for a gallon of gasoline than we did last Labor Day. The demand for gasoline usually drops by five percent after Labor Day as we settle back into our routines and as stations across the nation and region start selling less-expensive winter fuel blends as the weather gets cooler around mid-September. That normally leads to lower gasoline prices. But this is an abnormal pricing year. Here’s ample proof:gas prices have remained above $3.50 per gallonfor the 26th week in a row.This leads energy watchers to believe the so-called “summer-winter gasoline price gap” will remain wide, meaningwe might not we see much cheaper pump prices when the refineries begin producing the winter fuel mix.
Heading into the weekend, the latest dismal unemployment report – no new jobs were added in August – caused NYMEX futures to sink. But this year, there is a huge disconnect between crude prices and pump prices and gasoline prices should be much lower than they are now.
“One week after Hurricane Irene wreaked havoc on the East Coast, all eyes are on Tropical Depression 13 (we are not superstitious, but it has the ring of bad luck) now known as Tropical Storm Lee, and the Gulf Coast region.What happens there this weekend could impact pump prices in the immediate future,”said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic. “The storm is a rainmaker and could drop 24 inches of rain on the region and it is already shutting down some oil and natural gas production in the region.After all, ‘nearly half (49%) of U.S. refinery distillation capacity is located in the Gulf Coast region,’ according to theEnergy Information Administration (EIA).”
Another weekend, another big storm is churning upon the seas. As it wends its way across the Gulf of Mexico, Tropical Depression 13 has triggered tropical storm warnings along the Louisiana Coast. That could, in turn, trigger a spike in crude prices and pump prices. All eyes are on the region. After all, the Gulf of Mexico normally pumps about 1.5 million barrels of U.S. crude per day. That’s a quarter of domestic output. The Gulf Coast is the location of nearly 7,000 oil rigs and platformsand oil companies have ordered their personnel to evacuate offshore production platforms. The Louisiana Offshore Oil Port (LOOP) has suspended marine operations. However, the Loop is continuing to make “oil deliveries to refineries from its onshore storage facility,” OPIS is reporting. As we learned six years ago this week with Hurricane Katrina, any disruption to the area could send pump prices skyrocketing.
