Monthly Archives: December 2013

Gas Prices Surge To End 2013 Higher

AVERAGE PRICES SURGE 15¢ IN 2013’S FINAL WEEKS

gas price trend

Weekly gas price trends in the United States.

The price of a gallon gas spiked at the end of 2014, according to the weekly gas price survey from the Energy Information Administration. The EIA report shows the price of a gallon of regular unleaded jumped over 6¢ per gallon in the last week of December, ending the month the same way November concluded: with a shockingly high rise consumer costs. December’s month-end price spike was lower than last month, but the national average for a price of a gallon of gas, now at $3.33, is fully 15¢ higher than the low point on November 18 and 5¢ above where December started.

MIDWEST PUMMELED BY ICE STORMS AND HIGHER COSTS

The news across the Midwestern states has been dominated by the ice storms that ravaged the area during the past week, but the soaring cost of gas added insult to injury in the region. The price of gas hit $3.26 per gallon during the past week, up more than 10-cents from the previous week. While regular pricing volatility in the region has been known to cause wild price swings, the supply disruptions caused by winter storms has not helped the situaton.

Ice storms may have been partly to blame for a power outage at an ExxonMobil refinery in Joliet, Illinois; and MLive.com is also reporting this week that there were problems at a Phillips 66 refinery in Roxana, Illinois. The refinery issues in Illinois are believed to have been a significant factor in a consumer pricing lurch in Michigan, where the average price of gas soared more than 16¢ per gallon during the past week, the highest of any U.S. state.

TAXES, POLITICAL STRIFE AND TRAIN ACCIDENTS ADD TO WOES

A spate of year-ending issues are adding to the maelstrom of gas price hikes, including growing political problems overseas, particularly in South Sudan, where major oil pipeline supplies have been disrupted. That has caused Brent Light Sweed crude to soar in the past month, and that has also dragged the price of West Texas Intermediate crude with it.

The year end tax question also provides a partial answer to why fuel prices are leaping through the proverbial roof. Petroleum distributors and oil companies have to pay taxes on the supplies they have in stock at the end of the year, so supplies begin to evaporate ahead of the new year. Pricing generally peaks in the first week of January, following such a supply choke hold, only to fall by the middle and later part of the month.

ND Train Derailment

From The Chippewa Herald, this dramatic photograph of Monday’s train derailment in North Dakota shows the extend of damage that resulted from the accident and subsequent explosions.

Unfortunately for drivers, a crude oil supply train in North Dakota derailed and exploded Monday, with about 20 cars believed to have caught fire and burned, according to a spokesman for the BNSF Railway Company. The oil train derailed shortly after 2 p.m. Monday, forcing an evacuation of nearby Casselton, North Dakota. No injuries or deaths were recorded.

It is unknown how the North Dakota train accident will impact crude oil prices going forward, but the futures markets have been particularly sensitive in recent weeks to supply problems. The Sudanese situation, coupled with continuing political and civil strikes in Libya, have caused Brent to reach highs not seen since March 2012, while the WTI has traded above $100 per barrel during recent sessions.

Brent closed Monday at $111.21 after edging closer to the $113 per barrel mark in recent days, while WTI finally came down slightly, closing at $98.64 per barrel Monday.

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Gas Prices Pumped Up For Christmas

Prices Surge In Midwest, Pushing National Average Higher

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Dowload EIA report.

The price of a gallon of unleaded gasoline starting going up again, for nearly everyone in the United States, during the past week, breaking a brief downward trend that provided a respite for drivers. Just in time for the Christmas holiday, the Energy Information Administration’s latest survey shows the price of gas wrapped the week higher, moving up to $3.27 per gallon, erasing the price gains consumers had enjoyed at the pump just last week. Only the West Coast and Rocky Mountain states fared well last week, as prices remained flat in those regions.

Midwest Gets Hit With Price Volatility

Gas prices spiked across the Midwest, with surges over 8¢ per gallon in many areas, and higher in some. The average price of a gallon gas jumped from $3.08 to $3.16 during the past week. While winter weather may have contributed to the surge in prices, the more likely cause is the pricing volatility that can sometimes affect the Midwestern states. Indiana Public Media reported just last month that profit margins at stations in some cities are half what they are in other regions of the United States.

The executive director of the Indiana Petroleum Marketers and Convenience Store Association, Scot Imus, told indianapublicmedia.org some stations even sell gasoline below cost so they do not lose customers, but the flip side is the prices can often swing quickly — sometimes within an hour — to the upside.

Crude Prices Keep Rising Amid New Geopolitical Uncertainty

Texas toll roads

Whether commuting or traveling long distance, from Texas to New England, the cost of driving started going up again during this past week. This shot was taken near Round Rock, Texas.

The price of crude oil continued its stratospheric reach during the past week, particularly with  West Texas Intermediate futures, which were closing in on $100 per barrel during the past week. The price of WTI had been as low as $93 per barrel at Thanksgiving, but the cost of January deliveries has exploded on the trading floor, this as investors fear supply disruptions of Brent Light Sweet crude, which is being affected by political unrest overseas.

Brent, meanwhile, continued hovering around $112 per barrel in thin trading ahead of the actual Christmas holiday. The price point is not only a high for December but all of 2013, and overall, prolonged price trades of Brent have not been this high since March 2012.

The overseas instability in Libya persisted during the past week, despite assurances last week that supplies would begin returning to normal levels. Add to that new problems in South Sudan, where political instability has continued to plague the new nation and the economic infrastructure, or lack of it, inside the nation’s borders. A dispute over an oil pipeline that is shared with North Sudan, plus the potential for internal political strife within South Sudan, have resulted in a reduction of daily supply. Currently, the production of crude in the two Sudans is down about 45,000 barrels per day.

Diesel Prices Remain Flat Amid Gas Price Fluctuations

The pricing volatility that has affected both crude oil and the consumer gas prices does not appear to be impacting diesel fuel prices, according to the weekly EIA report. Prices for most regions were flat to just higher, with the Central Atlantic states paying a penny per gallon more this week than last. However, the broad U.S. average price for a gallon of diesel remains around $3.87 per gallon, the same as last week and about a penny per gallon less than reported two weeks ago.

However, the news may not remain so pleasant for diesel drivers, particularly truckers, who have to buy large volumes of fuel. The price of diesel typically lags behind the trend for gasoline, according the EIA 2013 surveys. If that trend holds through the holiday, truckers are likely to see their fuel costs increasing just ahead of the New Year.

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Gas Prices Finally Ease After Thanksgiving Price Surge

Prices Turn Downward, Although Crude Remains Higher

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Dowload EIA report.

Gas prices across the United States continued to relax during the past week, this following a month-long price surge that peaked in the days immediately surrounding the Thanksgiving holiday. The average price of a gallon of regular unleaded gas, at the national level, is now $3.24, although drivers in some regions are enjoying $3.00 gas. The lowest official price, according to the weekly gas price survey from the Energy Information Administration, is $3.05, along the Gulf Coast.

Prices in the New England states and across the Central Atlantic actually rose by about a penny per gallon, according to this week’s EIA report. Prices in California and across the broader West Coast region were primarily flat, although some price declines were seen in scattered areas. The biggest price drops, during the past week, were in the Midwest and Gulf Coast, where prices were down by over 5¢ in each region.

For truckers, the news about this week’s diesel prices is more tempered. Diesel prices across the U.S. declined by about a penny in many regions, although for most drivers, prices were fairly flat, week over week. The price of a gallon of diesel, nationally,  fell from $3.88 last week to $3.87 this week. 

Prices Remain Above Seasonal Lows

For drivers nationwide, gas prices remain above their November 11 low, when the nationwide average had fallen to about $3.19 per gallon. In many regions, the price was well below $3.00, with the Gulf Coast enjoying the lowest prices of all regions, at $2.98. However, prices began ticking upward the following week, only to surge over the Thanksgiving holiday and in the days afterward.

CME Group

The Chicago Mercantile Exchange, where crude oil futures are traded. Prices for January delivery have soared in recent weeks.

The volatility in prices came from a number of sources, from geopolitical conflicts in Africa and the Middle East, to refinery issues in the United States. Futures prices jumped dramatically the week following Thanksgiving.

The price of West Texas Intermediate has slipped  from its high on December 10, when prices reached $98.67 per barrel, for January delivery. The WTI remained above $97 per barrel on Tuesday afternoon, and prices are well above their low of $92.36, on November 27.

Brent Light Sweet Crude, meanwhile, remains near $110 per barrel, having come off its early-December peak of $112.24, the highest it had been in 18 months. Brent, as a benchmark commodity, peaked about one week before dragging the WTI with it, in a speculative upturn driven by the lingering political instability in Libya and a dramatic decline in crude inventories at the start of the month.

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Gas Prices Hold Steady, Officially, As Crude Keeps Rising

Prices Take A Breather, But It Could Be A Short Pause

Gas prices at Florida station

The price of regular unleaded jumped 10¢ in one day at this Florida station.

The price of consumer gasoline leveled off in most areas during the past week, although the Gulf Coast and Rocky Mountain regions experienced a decline in gas prices of two and four cents, respectively. Overall, however, the change in the price of unleaded gas was negligable, providing a cooling off period, of sorts, in the wake of heated price increases the previous week.

For the current survey period, the average price of a gallon of regular unleaded was flat, at $3.27, according to the latest weekly survey from the Energy Information Administration. The price of diesel was also flat, nationwide, while drivers on the West Coast did experience a slight dip in per gallon prices, about two cents.

Stability In Prices Not Likely To Last

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Dowload EIA report.

The relief from rising gas prices is not likely to endure, however, as crude oil prices continue to spike and refinery inventories shrink ahead of the Christmas holiday. October and early November’s trend toward seasonal and yearly low prices came to an about-face over the Thanksgiving weekend amid geopolitical problems in Libya, primarily a prolonged strike has prevented oil supplies from being loaded on transports. Word from political leaders in the North African nation Tuesday was that oil shipments could resume this weekend, perhaps on Sunday.

Crude Prices Up, Inventories Down

WTI Chart from CNBC

WTI crude oil futures have risen dramatically during the past ten days, closing in on $99 and narrowing a gap with Brent.

In the United States, a decline in crude oil inventories caught many industry analysts off guard, as inventories shrank by more than twice the expected rate during the past week, according to the American Petroleum Institute. The API report showed crude inventories dropped by about 7.5 million barrels during the week ending December 6; the forecast had been for a 3-million barrel decline.

Political instability abroad and declining crude supplies domestically have taken their toll on the futures markets, which TurnpikeInfo.com reported last week had begun to spike. West Texas Intermediate has been the most volatile, falling to a low of about $93 per barrel the day before Thanksgiving, only to go ballistic last week. The price of WTI moved closer to $99 Tuesday afternoon, althoug the price remained under that threshold at $98.54. Meanwhile, Brent Light Sweet Crude came off its highs last week; Brent is currently at just under $110 per barrel.

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Gas Prices Level Off In Some Areas, Top Off In Others

Gas Prices Are Mixed As Diesel Prices Begin A New Surge

March 11, 2013 gas prices

Gas prices could be heading higher than government forecasters expect as Brent crude oil prices flirt with levels not seen since March 2012. Strikes in Libya and other supply disruptions have pushed Brent well past $112 per barrel, dragging WTI futures for January with it. WTI closed north of $96 per barrel Tuesday.

The recent upward turnaround in gas prices has begun to do another about-face, although the rise in fuel costs for some has continued past the Thanksgiving travel period. The lingering high prices and price increases continued to affect mainly the East Coast region, while most other areas saw prices level off or return to the declines that were enjoyed during October and the start of November. The declines may not last, however, if futures prices continue their unabashed escalation.

Download Gas Price Survey

Dowload EIA report.

The latest weekly survey from the U.S. Energy Information Administration shows the average price of a gallon of unleaded gas is now at $3.27, down from $3.29 last week but still six cents higher than the seasonal and yearly low that was enjoyed two weeks ago.

The average price of diesel continued upward, and at a more brisk pace, during the past week. The average price of a gallon of fuel is now costing truckers $3.88 at the national level, but regional prices are as high as $4.06. Drivers in New England, broadly, in the east and California, specifically, on the west coast were paying the highest prices. The lowest diesel prices were to be found on the Gulf Coast, but prices there are still averaging about $3.78 per gallon.

Crude Oil Could Be Grinch That Steals Christmas

The price of crude oil has been quite mixed lately, and Brent crude has been heavily influenced by supply problems originating in Libya. An EIA report issued just before the Thanksgiving holiday showed the continued strikes at loading ports have depressed Libyan crude supplies by about one million barrels per day. Indeed, the price of Brent has remained above $110 per barrel since November 21, peaking at prices not seen since August, when other supply disruptions in Libya affected the price of overseas crude.

Gas station sign in Breezewood

Breezewood, Pennsylvania in May 2012, two months after the Brent futures’ last mad dash into territory above $112.

However, the markets took a new turn Tuesday afternoon as when Brent crude closed significantly above $112 for the first time since early 2012. Tuesday trading at the New York Mercantile Exchange brought a fresh price levels and pressures as the benchmark commodity flirted with the $113 level before retreating some later in the day. Brent crude has only been that at that level or higher on three brief occasions in the past three years, with March 2012 being the last time the commodity has priced so high. The cost of gas at the pump, during the late spring of 2012, reflected that pricing pressure.

Domestic crude, West Texas Intermediate, has also been under price pressure of late, and Tuesday’s trading session pushed the WTI dramatically higher in the wake of Brent’s Monday and Tuesday closings. WTI for January delivery swelled well past $96. WTI had been on a longer-term downward trend, closing even as low as $91.77 per barrel the day before Thanksgiving.

The price of WTI on the New York Mercantile Exchange was at $96.12 per barrel on Tuesday afternoon, just at 4 p.m., the first time since Halloween prices have been so high, and an increase of $4.35 per barrel, or about 5%, in just three trading sessions since the holiday.

Nevertheless, the EIA has maintained its forecast that January 2014 prices will rise, but only as a short-term event as season supply and refinery adjustments are made. The longer-term forecast is for consumer prices of gas to continue sliding lower during 2014. However, prolonged supply issues in Libya and Europe could impel traders to drive futures further upward, which is not originally a part of the EIA forecast.

The price disruptions on the futures markets, as have happened in the past few days, are not likely to leave consumers unaffected. The questions only will be whether crude prices level off, and if they do not, will retailers hold off hiking prices until after the holiday season? If retail distributors and operators anticipate significant supply cost increases in January, they could begin raising prices weeks before January deliveries get underway.

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