Although crude oil prices fluctuated throughout the week, prices at the pump stabilized somewhat, pulling back slightly from the dreaded $4.00 mark nationally.
The national average price of regular grade gasoline was $3.98 a gallon on Friday, 13 cents shy of the all-time record high of $4.11 a gallon set in July 2008. Prices at the pump were in line with last week, yet 17 cents higher than month ago prices and $1.09 higher than year ago prices.
With the Memorial Day holiday weekend less than two weeks away, motorists continue to watch whether gas prices cross the $4.00 threshold or continue to retreat.
“Crude oil’s volatility continues to directly impact gas prices,” said Martha M. Meade, manager of public and government affairs for AAA Mid-Atlantic. “Following last week’s record collapse in crude oil prices, gas prices almost immediately applied the brakes, dropping several cents early in the week and somewhat stabilizing by week’s end. For as quickly as gas prices go up, their retreat can be equally as slow, nonetheless any retreat is welcome news for motorists.”
Oil prices have been on a roller coaster this month, dropping a record $16 a barrel last week and trading with more than an $11 swing between highs and lows this week. This week’s volatility has been attributed to various factors – a see-sawing U.S. dollar, European debt issues and reports that Libyan leader Muammar Gaddafi may have been wounded by NATO air strikes.
Analysts expect volatility in the oil market to continue into next week, driven primarily by the dollar, noting volatility could remain high until true fundamentals (supply and demand) return with the peak summer driving season. Crude oil finished the week at $99.65, up 2.5 percent.
In its weekly report, the U.S. Energy Information Administration (EIA) data showed crude stocks increased 3.8 million barrels to 370.3 million barrels, matching the high stock yield of two years ago. Gasoline stocks rose 1.3 million barrels, after dropping for eleven straight weeks, to 205.8 million barrels. The EIA report also notes the four-week average demand was at 19.11 million bpd, about even with last year.
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Chris Graham
