Gas Prices Level Off Momentarily As Crude Trades Above $100 Again

After Weeks Of Rapid Increases, Gas Prices Rise At Slower Pace weekly gas price trend

The cost of driving kept going up for most of us during the past week, according to the latest weekly survey from the U.S. Energy Information Administration. However, the weekly gas price increases, which have been dramatic of late, slowed considerably for many regions during the current survey period, with the nationwide-average barely budging.

Even so, some regions, like the Gulf Coast and the West Coast, endured another weighty increase in costs during the past week. The national average price for a gallon of gas, as of March 24, held steady at $3.55.

Drivers In Urban Cores Paying Much More Than National Or Home States’ Averages

For some states, particularly California, the cost of a gallon of regular unleaded neared the $4.00 mark, with many stations charging well above that figure. The average price of a gallon of gas in the Golden State is now $3.97; in other states, like New York, the price of gas is averaging about $3.75 per gallon.

But state averages do not tell the entire picture. In Florida, that $3.75 price point for the lowest-grade of unleaded is being charged to drivers at gas stations in many cities’ urban cores, even though the Sunshine State’s average per gallon price is $3.53 per gallon.

In Fort Lauderdale, prices at some stations were as much as 23¢ higher than the state averages. Moreover,  weekly price increases have been moving at a faster pace than the national average.

Weekly gas price increases
Gas prices in Fort Lauderdale, like many cities, are higher than their home states’ averages.

Crude Inventories Rising, But Not At Biggest Storage Facility

U.S. Domestic crude oil inventories continued to rise during the past week, bringing the number of weekly increases of crude supplies to 10. Even so, the biggest crude inventory storage facility, located at Cushing, Oklahoma, saw another weekly decline of crude inventories. For the past seven weeks, inventories at Cushing have dropped about 29%, according to the EIA. However, many facilities and pipelines that have traditionally supplied Cushing have been able to bypass the facility and send their supplies directly to refineries on the east and west coasts, as well as to the Gulf of Mexico.

Even with an increase in broader crude inventories, nationally, overall gasoline inventories have been declining since the start of the year. In fact, gas inventories are down just over five-percent since the end of January, when a lag in consumer demand resulted in a short-term spike in supply.

The EIA reports the United States currently has about a 26-day supply of gasoline, not including the strategic petroleum reserve. The current inventory is line with the inventory supplies compared with data from this time one year ago.

Crude Futures Markets Mixed On Domestic And International News

Meanwhile, crude inventory prices on the New York Mercantile Exchange were flirting with the century mark in midday trading Tuesday, with prices of West Texas Intermediate (WTI) briefly trading just over $100 per barrel before retreating in the early afternoon. The current trades are for May contracts.

One analyst told Bloomberg News earlier Tuesday that he expected the WTI price point to drop as low as $95 per barrel by the end of the week, both on lower domestic demand and higher inventory data. Even so, broader concerns about overseas crude oil supplies could play a role in keeping prices closer to $100.

Reuters reported Tuesday afternoon that Libyan oil production would be cut another 80,000 barrels per day, bringing total output in the embattled nation to only 150,000 barrels per day. Lingering concerns about the crisis in Ukraine continued to weigh on futures prices, as well.

The price of Brent Light Sweet crude moved higher during early Tuesday trading and remained over $107 per barrel in mid-afternoon trading.


Gas Prices Continue Their Upward Trek As Spring Break Begins

Spring Season About To Begin With Drivers Already Paying More For Gas weekly gas price trend

The price of a gallon of gas continue to get costlier during the past week, with the average price of a gallon of regular unleaded now at $3.55, this according to the latest weekly survey from the U.S. Energy Information Administration

Gas prices have been on a steady upward climb for the past six weeks. The cost of a gallon of fuel was less that $3.30 per gallon at the start of February, but continued winter weather, geopolitical instability in North Africa and Ukraine, combined with rising global demand for crude oil, have all contributed to a continued spate of price increases. The upward trend also shows no sign of coming to an end.

Although domestic crude oil prices finally slipped below $100 per barrel last week, they were pushing toward the century mark once more amid the escalation of tensions between the United States and Russia over Crimea, the apparent breakaway peninsula of Ukraine. The crisis in Ukraine has continued to weigh heavily on the price of commodities, particularly crude and natural gas.

A significant portion of Europe’s natural gas supplies pass  through Ukraine, and the country is also a major supplier of corn stocks which are converted to ethanol. Ethanol is later blended into U.S. gasoline products for retail sale.

EIA graph of regional gas prices

The other problem pushing prices higher is the seasonal adjustment toward summer gasoline supplies. Crude oil supplies had been declining during the past couple of survey weeks, according to the EIA. With the spring and summer driving seasons just around the corner, springtime fuel costs traditionally increase. This year’s price increases are coming on top of existing and atypical price hikes that have plagued drivers so far this year.

Truckers Feeling More Pinch At The Pump

Diesel fuel costs are no better, either. The average price of a gallon of diesel fuel is about two cents less this week than last, but the overall trend has been higher for most of 2014. The current U.S. average price for a gallon of diesel is back down to $4.00, from $4.02 last week, but that figure is about nine cents higher than the start of the year.

For some regions, like the Central and Lower Atlantic regions, truckers are paying considerably more for fuel than even a few months ago, and the year over year numbers are downright dismal. Truck drivers in the Central Atlantic region are paying about 17¢ per gallon more for diesel than at this time last year, while the drivers in the Lower Atlantic states are paying about 10¢ per gallon more.

At the national level, the price of diesel is about four cents per gallon less than at this time in 2013.


Gas Prices Reach Over $3.50 As West Coast Gas Nudges Toward $4.00

Crude Oil Supplies Higher, But Overall Gasoline Supplies Are Lower weekly gas price trend

The price of gas kept moving higher during the past week, according to the latest weekly survey from the U.S. Energy Information Administration. The weekly EIA report shows the price of an average gallon of unleaded gas in the U.S. is now at $3.51, up three cents from last week, extending the current spate of price increases to a fifth consecutive week.

Of the ten weeks tracked so far in 2014, six have seen higher gas prices than the previous week. Overall, prices are up 21¢ per gallon, nationwide, during the past five weeks. That figure represents about $3.15 more at the pump, based on filling up a 15-gallon tank. On an annual basis, assuming a commuter is filling up twice per week, that comes to almost $328 more per year for gas. What is more, the price of gas is not likely to have stopped rising.

Crude Oil Price Barrels Downward, But The Cost Of Ukrainian Corn Could Stalk Markets

corn ethanol
Fear of increasing prices of of corn exports from an unstable Ukraine has added to the increase in gas prices, according to one analyst. Corn is refined into ethanol, which is blended into U.S. gasoline.

The price of West Texas Intermediate crude oil has finally begun to fall, after a meteoric rise last week that saw the futures index push to near $105 per barrel for April delivery contracts. WTI was trading as low as $99.64 per barrel around mid-day Tuesday, but prices on the New York Mercantile Exchange had risen late in the trading session. Nonetheless, it was expected WTI would close below $100 for the first time in nearly a month.

Part of the reason for the decline in prices was an increase in crude oil stocks in the past week, and inventories were expected to be up this week, as well. The weekly inventory reports are issued every Wednesday.

However, the political and military crisis in Ukraine, which had combined with wild winter weather to push WTI and Brent Light Sweet Crude prices higher in the past few weeks, is still weighing on refineries. The reason is corn. Ukraine ships a large amount of corn to the United States, where it is refined into ethanol that is blended into fuels.

Trilby Lundberg, who conducts the regular Lundberg gas survey each week, told CNBC the uncertainty in Ukraine had definitely become a factor in ethanol prices. However, she said the price increases that could be pinned on the Ukraine crisis would not continue affecting fuel prices in the United States unless the situation became markedly worse. Nonetheless, the upward pricing trend was not likely to end, primarily because the approaching change of seasons.

Approach Of Spring Break Brings No Break For Gas Prices

The coming spring and summer driving seasons, replete with summer blends of gasoline coming out of refineries in the next few weeks, means that prices will continue rising, most likely through May, according to Lundberg. While short-term price hikes may be smaller than recent weeks, Lundberg predicts the onset of peak driving season will bring higher demand for more expensive fuels, which typically happens in the early and mid spring.

Meanwhile, the cost of gas is still lower than at this time last year. The average price of a gallon of gas was about $3.71, measured nationally; and that was down $12¢ from 2012 prices. Even so, the EIA had predicted gas prices would decline through most of 2014, which has not manifest so far.

Depending on what happens in Ukraine, Brent Crude could surge higher, dragging WTI with it, bringing a new round of heavy-handed price increases for drivers.


Gas Prices Keep Moving Higher, And Ukraine Crisis Is Not Helping

Gas Price Hikes Unabated As Futures Soar Amid Presence Of Russian Troops in Crimea weekly gas price trend

The price of gasoline in the United States continued moving higher during the past week, continuing a trend of rising energy prices that has defied earlier government predictions of a drop in consumer prices through 2014. The U.S. Energy Information Administration’s weekly price survey shows a gallon of regular unleaded gas is now $3.48, about four cents higher than last week and 15¢ higher than the start of 2014. While gas prices are still down from one year ago, the current upward run in prices had not been expected.

First, a nasty series of winter cold spells has strained refineries and supplies of heating oil, propane, natural gas and kerosene, all vital sources of winter heating.

Add to that the increased tensions Europe and Russia, and the result is a new rally in crude oil prices. There was a meager spot of good news this week as gas prices fell slightly in the Lower Atlantic states, but that only served to tame what would have been a much higher average weekly price increase at the national level.

As it was, the 4¢ weekly uptick was fed by price surges in the Midwest, where prices were up nearly 6¢; the Rocky Mountain states, where prices jumped 7¢; and along the West Coast, which also endured a 6¢ price hike. Truckers enjoyed some stabilization of prices this week, with only the Rocky Mountain region suffering a noticeable increase in the price of diesel fuel.

Overall, however, the national average price for a gallon of diesel remained at $4.02 during the  week. Prices increased slightly in California and the lower Atlantic states, while declining along the Gulf Coast.

Futures Surge Amid Russian Troop Movements In Crimea And Tension in Europe

The wicked winter weather in the United States had already pushed crude oil prices somewhat higher, and increased demand in China had also been contributing to a recent rally in energy futures.

However, the crisis in Ukraine, reaching a new peak during the past few days, has moved traders to push the price of West Texas Intermediate to a new high Monday, with the benchmark domestic futures price closing up $2.33 per barrel, flirting with a $105 per barrel price point.

That is a level not seen since the end of September. Brent Light Sweet Crude was over $111 per barrel, although that was down from intraday trades that were over $112.

The New Ukrainian Influence On U.S. Gas Prices

Protesters in Kiev, Ukraine
Kiev, Ukraine – March 2, 2014: Protesters display posters against Russian President Vladimir Putin and the presence of Russian troops in Crimea. Source: Getty Images / iStock Photo.

The interim Ukrainian government’s ambassador at the United Nations, Yuriy Sergeyev, distributed a letter to Security Council members Monday asserting Russia had sent about 16,000 troops into the autonomous Crimea region of Ukraine. Mr. Sergeyev said the Russians were moving to block and control key government and military posts in Crimea.

In Kiev, the capital of Ukraine, protesters continued to demonstrate during the weekend against Russian intervention in the peninsular region, which is historically a Russian territory and is also home to Russia’s Black Sea Fleet.

The tensions pushed investors to shed stock holdings Monday and put money into energy futures, which has added to the soaring price of crude oil, a major driver in consumer gas prices going forward.

WTI was as low as $93 per barrel in November, and one analyst predicted last week short term crude prices could spike between $110 and $113 per barrel. However, that prediction was made before the escalating crisis in Ukraine.

Part of the issue at hand, as tensions continue to mount, is that Russia is a major energy supplier to Europe. About 25% of Europe’s liquid fuels come from Russia, and half of Russia’s pipelines move through Ukraine, which has been economically unstable, in addition to suffering political volatility in recent months.

Supplies In Europe Stable For Now, But U.S. Inventories May Be Declining

While the United States and European leaders debate their response to Russia’s troop movements in Crimea, it was estimated Europe has enough natural gas storage to cover a disruption in supplies from Ukraine for about 45 days. A contributor to that storage surplus is the mildest winter for Europe since 2007. The result has been a higher-than-average inventory for the European Union, according to Gas Infrastructure Europe, a group of pipeline operators located in Brussels.

oil storage tanks
Investors were anticipating heating oil and diesel inventories in the United States would be down this week, possibly adding to new speculative investment in crude oil futures, which could drive futures and consumer gas prices even higher.

Quite the opposite situation was anticipated in the United States, where the Midwest and Northeast have endured their coldest winter in two decades, leading to dwindling stockpiles of heating oil and diesel, possibly as much as one-million barrels during the past week, alone.

Bloomberg News was reporting Monday night that investor anticipation of Wednesday’s EIA inventory report were keeping prices inflated. However, Bloomberg also reported a technical indicator showed that WTI futures were overbought, which may lead to short term futures declines, after all.

How that may affect drivers buying gas at the corner station remains to be seen.


Editor's note: This report has been corrected. The original story reported the weekly EIA inventory report would be released on Tuesday. The report is released every Wednesday.