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.”
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