Gas prices heading back down with pipeline back up and running
Gas prices in most of the Mid-Atlantic region have begun to decline slightly for the first time since the Colonial Pipeline began pumping gasoline again on September 21, a large contrast to the spikes seen in much of the area as a result of pipeline’s leak and subsequent closure on September 9.
The national average price of regular unleaded gasoline remained relatively stable over the past week, settling at today’s price of $2.22 per gallon. Drivers are paying the same price per gallon month-over-month, and seven cents less per gallon year-over-year.
“Now that repairs have been made to the Colonial Pipeline, drivers in a number of Mid-Atlantic regions are paying less at the pump week-over-week, including those in areas of Virginia.” said Tammy Arnette, Public Affairs Specialist for AAA Mid-Atlantic. “While local drivers may be seeing a bit of relief, market analysts at OPIS report that many marketers are warning that supply will still be touch-and-go through the next few days.”
At the close of Friday’s formal trading session on the NYMEX, West Texas Intermediate (WTI) closed up $3.76 from last week to settle at $48.24 per barrel. In the last week, crude oil has closed between $44 and $49. On Wednesday, the Organization of the Petroleum Exporting Countries (OPEC) agreed to modest oil output cuts in the first such deal in eight years. The move would effectively re-establish OPEC production ceilings abandoned a year ago but how much each country will produce is to be decided at the next formal OPEC meeting in November, when an invitation to join cuts could also be extended to non-OPEC countries such as Russia.
Now that the issues surrounding the leak in the Colonial Pipeline seem to be contained, local drivers should continue to see a slow decrease in gas prices. Stations have switched over to winter-blend gasoline, which is less expensive to produce and the demand for gas has dropped, following the busy summer driving season. AAA predicts that consumers could experience national average prices below $2.00 at the pump if the price of crude oil remains relatively low and there are no unexpected production issues.