Price Declines In Recent Weeks Come To Abrupt Halt
The price of gasoline, which has been going down for several weeks, did an about-face last week as the cost of filling up suddenly lurched upward a few cents. The Midwest, Central Atlantic and Lower Atlantic regions of the U.S. were hardest hit, with gas price increases of four and five cents per gallon, on average.
The national average price of gas slipped upward to $3.22 per gallon of regular unleaded, according to the weekly gas price survey from the U.S. Energy Information Administration.
Even the Gulf Coast, which enjoyed a week with official survey prices below the $3.00 threshold, found the average price of gasoline back to the 3-dollar mark, although many stations from Texas through the Florida panhandle have prices well below $3.00.
Despite the increase in gas prices in the eastern states, the West Coast region and the Rocky Mountain region of the U.S. enjoyed more relief from price pressures at the pump. The average price of gas in the Rockies and the broader West Coast regions fell an average four cents per gallon, with the price of unleaded ranging in average from $3.18 in Idaho and Montana to $3.47 in California.
Diesel prices also continued to decline during the past week, helping offset shipping costs related to fuel. The average price of a gallon of diesel was down to $3.82 across the nation, although truckers in New England are still paying at or above $4.00 in some places. As with regular gas, the lowest costs for diesel are in the Gulf Coast region.
Gas Price Increases Not Expected To Endure
The uptick in prices for most regular drivers may be short lived. The EIA has long been forecasting continued declines in petroleum prices, with an expected upward turn in prices only expected in January. The EIA long-range forecasts show the price of fuel will keep falling through December, rise slightly in January, then continue declining for the remainder of 2014.
The upward pressure on prices may have been the result of tighter gas supply stocks after the first week of November. The EIA’s weekly petroleum status report, which is separate from the gas price survey, shows the weekly motor gasoline stocks declined by about 8-million barrels from November 1 to November 9, and crude oil input to refineries also declined during the same period. The crude stocks dropped from a high of 14.95-million barrels per day on November 1 to only 14.73-million barrels per day on November 9. However, daily crude input to refineries can fluctute considerably from day to day.
As for the crude oil prices, themselves, West Texas Intermedia continues flirting with levels below $93, although prices were up to $93.37 after the lunch hour Tuesday. Brent crude has also continued to remain well north of $100, and was trading near $107 per barrel late in the day Tuesday. The issue with crude, however, is two-fold.
On one hand, current prices are for December delivery, although fuel suppliers, including gas retailers, use a last-in, first-out accounting method. On the other, foreign crude supplies account for only about 40% of U.S. oil consumption, leaving the WTI with greater influence on domestic fuel costs to drivers.