Drivers Enjoy Break In Price Increases
For the first time in several weeks, the price of gasoline finally began to decline, but the news for truckers was mixed during the past week, according to the latest survey from the U.S. Energy Information Administration. The average price of a gallon of unleaded fuel slipped downward just over 3¢ per gallon during the past week, according to the survey report, which was delayed this week for the Martin Luther King, Jr. Holiday.
The average price of gas fell to $3.30 per gallon, and while the nationwide average cost of diesel fell about a penny, the cost of diesel went up between 1¢ and 2¢ per gallon across the East Coast, New England and the Central and Lower Atlantic regions.
Unleaded Costing Less Across All Regions
The price of unleaded dipped in every region of the U.S., although the declines were barely noticeable for drivers along the Gulf Coast and the West Coast of the U.S. For California, however, prices dipped as much as a nickel per gallon.
The biggest price decline came in the Midwest region, which is known for wild price swings from one week to the next. Drivers across Michigan, Indiana, Iowa and Illinois felt prices drop just over a nickel per gallon, although the arrival of new winter storms this week has brought new problems at the pump, as refineries shift gears and try to meet an almost extreme demand for propane, the preferred heating fuel for many households in the Midwest.
Across the East Coast, New England and Atlantic States, the price of a fill-up dropped as much as 4¢ per gallon, although the Lower Atlantic states, barely saw prices move, in line with the neighboring Gulf Coast region.
Increased Demand Forecast Pushes WTI Crude Higher
While the forecast for gas prices is a long-term trend toward lower costs, the price of U.S. crude oil has been on a wild swing during the past two months, starting with dramatic price declines ahead of Thanksgiving 2013 that were completely reversed by the middle of December.
The volatile West Texas Intermediate futures closed at over $95 per barrel Tuesday as the International Energy Agency – not to be confused with the U.S. Energy Information Administration – announced global crude oil demand would increase by 1.3-million barrels per day this year, about 50,000 barrels per day more than originally expected.
The increase in global demand has put upward price pressure on WTI, which is also under trading pressure as February contracts begin to expire. Traders are buying additional contracts to cover their positions ahead of those contract expirations, according to a financial report on CNBC.com.