Prices Continue Their Autumn Fall
The nationwide average price for a gallon of regular unleaded fell to $3.06 during the past week, according to the U.S. Energy Information Administration. That figure is down six cents from the previous week. As with all weekly surveys, this week’s E.I.A. report shows some regions enjoyed a larger decline, particularly the West Coast, where prices fell 10¢ per gallon to settle at a regional average of $3.32.
The cheapest regional prices were found across the Gulf Coast region, once again, where the average retail cost for gas is now only $2.83 per gallon. Part of the reason for the decline in prices is the high output of U.S. shale production and a slowing global demand. The price of crude oil futures, particularly West Texas Intermediate, has fallen dramatically since its summer highs. Price have been trading in a narrow range for days, flirting with the potential of falling below the $80 per barrel threshold.
Year Over Year, Gas Is Significantly Cheaper
That has been good news for drivers. The cost of gas has fallen so much in the past several weeks, the cost of fuel is now anywhere from 17¢ to 30¢ per gallon cheaper than at this time last year, depending on the survey region. That good news extends to truckers, too, who are also paying substantially less this year for diesel fuel.
Overall, the price of diesel has not fallen as dramatically as gas prices in recent weeks; however, the year-over-year price difference of diesel fuels is identical to the price of gasoline. For both types of fuel, the U.S. average price is 24¢ cheaper than 2013’s rate.
There are indications retail prices could push even lower, especially if crude oil prices continue their free-fall. In fact, overseas crude oil prices, which have also fallen substantially, may not have the power to reverse course with the same gusto as in previous years. The reason is a decline in the pricing power member nations of OPEC, the Organization of Petroleum Exporting Countries.
The reason comes back to U.S. shale production, according to Jeff Currie of Goldman Sachs. Mr. Currie made his comments on CNBC, telling reporters that the United States has more power to influence price swings.