Month: October 2014

Gas Prices Fall Below $3.00 In Many Areas

The nation’s average per-gallon gas price dropped 9-cents for the second consecutive week, according to the latest survey from the U.S. Energy Information Administration. The E.I.A. report shows the average price for a gallon of regular unleaded is now only $3.12, down 59¢ per gallon since prices peaked just before the start of summer.

Based on a 15-gallon tank, the average U.S. driver is now paying almost $9.00 less per fill-up than six months ago.

In some regions of the U.S., the average price for that survey district is now less than $3.00 per gallon, such as the Gulf Coast, where prices are now, officially, averaging about $2.91 per gallon. Even on the West Coast, where prices were regularly north of the $4.00 mark during summer, the price of a gallon of gas has finally fallen below $3.50. In fact, the West Coast average gas price plunged over 11¢ during the past week to settle at $3.42.

Crude Oil Leveling Off, But Drivers Still Benefit From Previous Declines

Part of the reason for the dramatic drop in gas prices has been the market response to driver demand and the glut of oil in the United States. Shale oil production pushed U.S. domestic crude prices ever lower, even as demand around the world began to fall on a slowing economy. Then the end of the summer driving season hit, sending crude prices down to trade under $80 per barrel. While prices have rebounded this week, West Texas Intermediate, the domestic crude benchmark, is trading between $83 and $84 per barrel. That is down over $20 per barrel from WTI’s early-summer high. Prices began declining in the last days of June, but the plummet only happened in the past three weeks.

Meanwhile, the benefit for drivers has been most noticeable. Even drivers in the Midwestern United States, where price volatility plagued the summer driving season, prices have continued to fall at an ever-increasing pace.

However, Ohio still suffers under the lash of retail price swings, as evidenced by a 6¢ per gallon price increase in the past week.

Nonetheless, most drivers across the midwest are paying an average of only $3.03 per gallon. In Minnesota, however, the average price for all formulations of regular unleaded gas are down to $2.95 per gallon.

Urban Gas Prices Still Significantly Higher Than Highway And Rural Stations

While gas prices continue to decline in nearly all areas of the United States, city drivers are finding that retail prices remain higher in the city than in rural areas and at gas stations along turnpikes and interstate highways.

Part of the reason is the lack of real estate for competition stations in inner city areas, but the pricing disparity can often be quite dramatic, almost as if to make a demonstration of market influences of supply and demand. What is more, the pricing differential does not appear confined to a single region.

For instance, during the peak summer driving season, when prices were at their highest, the cost of unleaded in inner-city Chicago was $4.28 per gallon at a BP station inside the loop, on Congress Avenue. However, just outside the city, at the Hinsdale Service Plaza on the Tri-State Tollway, the price of gas was only $3.97.

In Florida, where tourist travel brings out-of-state drivers in high volume during summer and winter, the price differential between inner-city and suburban areas is equally dramatic. Prices in Oakland Park, Florida, adjacent to Fort Lauderdale, were only $3.25 on October 12. Four days later, in nearby Fort Lauderdale, spotters for TurnpikeInfo.com found prices were still $3.49 per gallon. According to the E.I.A., Florida’s average gas price on October 20 was calculated at $3.09 per gallon.

Pictures Of Urban Versus Suburban Gas Prices

 

 

 

 

Truckers Catching Big Break As Diesel Prices Slip Downward

Meanwhile, the suburban and rural gas pricing is likely an issue that favors the nation’s truckers, who are usually between cities on long hauls. The E.I.A. survey shows the price of diesel fuel declined 4¢ per gallon during the past week to $3.66, although prices remain close to the $4.00 mark across the West Coast, particularly California.

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Lowest Crude Prices In Nearly 30 Months Brings Relief To Drivers

The price of a gallon of gas hit a new low for the season as the national average cost fell to only $3.21, according to the latest weekly survey from the U.S. Energy Information Administration. The EIA report shows gas prices at the national level fell more than 9¢ per gallon over the past week, although some regions experienced a larger decline. For the Gulf Coast region, prices have fallen so low that some stations are selling fuel for less than $3.00 per gallon.

Region by region, the news for drivers is very good. Even on the West Coast, where prices are traditionally the highest in the country, the price of regular unleaded has fallen to $3.54 per gallon, and while that number is much higher than other survey regions, it is more than 50¢ per gallon less than the peak price, which was recorded at $4.07 per gallon in the April 28, 2014 survey.

For most drivers across the U.S., the price of gas ranges between $3.20 and $3.35 per gallon.

The declining cost of retail gas is due to a decline in global demand, a slowdown in U.S. demand with the end of summer driving, and higher shale oil production in the U.S. These factors, among others, have pushed domestic crude oil prices to their lowest levels since the end of June 2012; West Texas Intermediate (WTI) was flirting with the $80 per barrel level early Tuesday, down about $25 per barrel from the summer peak. Overseas, Brent Light Sweet Crude is also at a low point. In fact, the spread between Brent and WTI was less than $3 dollars Tuesday. The difference between the two benchmark futures indices has been much greater in recent years, sometimes more than $25 per barrel, according to MarketRealist.com.

Urban Gas Prices Higher Than Regional Levels

While all drivers are catching a price break at the pump, drivers in many cities are not getting quite the break their rural counterparts are enjoying. Overall, prices in urban areas are down, but drivers typically pay as much as 35¢ per gallon more at some city gas stations than they would if they drove just a few miles out of town. For instance, prices in the Lower Atlantic states are current averaging $3.15 per gallon, but prices in the urban core of Fort Lauderdale, the home of Turnpike Information Company, are as high as $3.49 per gallon. In adjacent Oakland Park, Florida, which shares a border with its larger neighbor, prices are only $3.25 per gallon for regular unleaded, a 24¢ difference.

Truckers Getting A Price Break, But Not As Dramatic

The price of diesel fuel is coming down, but not as quickly as the cost of gasoline. The price of retail diesel fell by about 4¢ per gallon during the past week, brining the national average price of diesel down to $3.70. Prices fell the most across the West Coast and the Central Atlantic states. California has the most expensive diesel in the U.S., with prices still near $4.00 per gallon; the Midwest and Gulf Coast regions have the lowest diesel prices at the moment, with averages in each region currently at $3.64 per gallon.

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Prices Drop Substantially With Crude Oil As Inventories Increase

An increase in domestic crude oil inventories, lower consumer demand and a slowing global economy all have contributed to a new slate of drops in crude oil prices, this as the September declines in crude are now beginning to be noticed at the pump. The average U.S. price for a gallon of regular unleaded fell a nickel last week, bringing the price of gas to $3.30, according to the latest survey from the U.S. Energy Information Administration. Last week, prices at the national level were largely unchanged, according to the survey.

Prices at the retail level have been following declines in crude oil futures. West Texas Intermediate, the domestic crude, is down more than $15 from its summer high. It was trading just under $89 per barrel on the New York Mercantile Exchange midday Tuesday. The overseas crude benchmark, Brent Light Sweet Crude, is trading under $93 per barrel, a price point more common for WTI. Part of the reason for the decline is a rise in domestic crude inventories. A Bloomberg survey last week found stocks had increase by 2-million barrels, adding inventory amid a slowdown in consumer demand. What is more, the International Monetary Fund announced Tuesday it had reduced its global growth forecast for 2015.

Regional Volatility Adds To District And Nationwide Price Movement

This week’s gas price plunge was much larger for the Midwest Region, which is known to have greater pricing volatility than other survey districts. Prices from Wisconsin to Ohio dropped an average of 10-cents per gallon during the past week, with cities like Chicago and Cleveland enjoying average declines of 9¢ and 10¢, respectively.

The Lower Atlantic states had the lowest price decline of all the regions, at just one penny per gallon. Meanwhile, the Gulf Coast continues to enjoy the lowest prices in the nation. With the cost of gas dipping about a nickel per gallon in most spots, the average price from Texas to Alabama is about $3.11 per gallon. The West Coast remains the most expensive place to gas up, with average prices for regular unleaded gas going for about $3.61.

DOWNLOAD THE WEEKLY GAS PRICE SURVEY