Prices at the gas pump have slipped to new 2014 lows this week and signs indicate prices will head lower still. The national average price for regular unleaded gasoline dropped to $3.24 per gallon Friday. This price is the least expensive daily average of 2014 and the lowest gas price average since December 22, 2013. Friday’s average is eight cents less than one week ago, 19 cents less than one month ago, and 11 cents less than one year ago. The national average has fallen for each of the past 15 days (through Friday) and could drop as low as $3.10-$3.20 per gallon before the end of the year.
In the Mid-Atlantic region, Delaware, Maryland, New Jersey, Pennsylvania and Virginia also reached 2014 gas price lows this week.
Global oil prices have continued to slide as supplies have outpaced demand and markets remain relatively unmoved by geopolitical tensions in the Middle East, Europe and Africa. Last Friday crude oil settled below the $90 per barrel mark for the first time in 17 months, breaking a streak of 365 consecutive settlements above this threshold. On Monday, crude oil closed slightly higher at $90.34 per barrel but for the balance of the week the commodity continued settlements at the sub-$90 per barrel price. Thursday’s closing cost of $85.77 per barrel was the lowest settlement price since December 2012.Crude oil closed at $85.82 per barrel Friday, down nearly five percent on the week.
The Energy Information Administration (EIA) noted in its weekly report that crude oil inventories saw 5-million barrel build to 361.7 million barrels. Gasoline stocks saw a 1.2-million barrel build to 209.7 million barrels. Gasoline demand by the EIA metrics is having difficulty getting up off of the mat as it has not been able to recover from a post-Labor Day drop. Gasoline demand dipped slightly to 8.645 million b/d last week, but the rolling four-week average is 1.3% behind a year ago. Falling retail prices and decent weather could give gasoline demand a bit of a pop over the next couple of weeks.
“Prices at the pump have dropped to the lowest level of the year in many areas, including most of the Mid-Atlantic region,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Barring any unforeseen circumstances, we will likely see the lowest gas prices since 2010 in the coming weeks, which is certainly welcome news for motorists.”
AAA projects drivers in as many as 20 states could enjoy an average price of less than three dollars per gallon before the end of the year, given relatively inexpensive crude oil prices, healthy supplies, low demand, and barring any unexpected calamities that could threaten supply, production or distribution of oil or gasoline.
In addition, this year’s Atlantic hurricane season is turning out to be the quietest since 1983, with only six hurricanes named so far. Atlantic hurricanes can have a devastating impact on refining, oil production and supply logistics on the Gulf Coast and East Coast as seen with Hurricane Sandy in 2012, Hurricane Ike in 2008 and Hurricane Katrina in 2005. While the quiet hurricane season is coming to an end soon, it is noted that Hurricane Sandy hammered the East Coast at the end of October 2012.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
| 10/12/14 | Week Ago
10/5/14 |
Year Ago
10/12/13 |
|
| National | $3.21 | $3.30 | $3.35 |
| Virginia | $3.02 | $3.11 | $3.15 |
| Charlottesville | $3.01 | $3.08 | $3.06 |
| Norfolk Area | $3.07 | $3.15 | $3.16 |
| Richmond | $2.91 | $3.03 | $3.10 |
| Roanoke | $3.01 | $3.06 | $3.07 |
| Crude Oil | $
per barrel (at Friday’s close, 10/10/14) |
$89.74
per barrel (Friday 10/3/14 close) |
$103.01
per barrel (10/10/13) |
AAA is the most comprehensive resource for gas prices. Unlike the Lundberg Survey of 7,000 gas stations, AAA reports reflect actual prices from credit card transactions at more than 100,000 gas stations in the U.S.
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Chris Graham
