The price of gas took a moment to retreat from late summer highs during the past week, according to the latest survey from the U.S. Energy Information Administration. The EIA’s weekly gas price survey shows the average price of a gallon of unleaded gas dropped by about two cents per gallon, although bigger price declines were enjoyed by the hard-hit Midwestern States and their commuters. Higher prices hit the Rocky Mountain states and the West Coast, although California gas prices are the primary reason for the upswing in fuel costs in the Far West.
The drop in gas prices is likely due to a pair of factors. One is the summer driving season has come to an end, with parents in nearly all states now home for the back-to-school rush. The other component of the retreating fuel prices is the drop in oil futures. Futures prices spiked around September 3, but they have been declining since September 4, and aside from a momentary high point on Monday, WTI futures, Brent crude and natural gas futures all are experiencing declining prices.
As oil futures prices decline, prices sometimes relax quickly at the pump; although, typically there is a greater lag time experienced when futures decline, versus the affected price at the pump. Nonetheless, the lower demand for gasoline, especially for summer travelers, coupled with the past week’s drop in oil futures, could lead to a stabilization of gas prices, if not further declines.
Meanwhile, truckers and other drivers of diesel cars found their prices mostly flat to slightly higher during the past week. The average U.S. price of diesel was unchanged last week, but prices on the West Coast and in New England were up. Prices for truckers in the Midwest were down, however.
Overall, drivers enjoying a much lighter impact from gasoline purchases on their wallets. The year over year numbers are nearly stellar in most regions. The average motorist will notice the price of gas is down by over 25¢ per gallon since this time last year, despite a major spike in prices that affected most of us earlier in 2013. The current unleaded cost of $3.59 per gallon is well off 2012’s figure, which was $3.85.
Unfortunately, however, the price of gas for drivers in California and the West Coast still averages near $3.80 per gallon at the moment, but that number is down from nearly $4.10 per gallon, on average, for the start of school in 2012.
For truckers, the news is nearly as good, with the average trucker on the U.S. East Coast paying about 15¢ less for a gallon of diesel this year; drivers in California and the West Coast are enjoying twice the price savings in 2013, with about 30¢ per gallon decline in diesel prices versus this time last year.