Prices Continue Falling, With A Glitch For Truckers
The price of a gallon of gas continued to fall through the floor during the past week, according to the latest weekly gas price survey from the U.S. Energy Information Administration. The weekly E.I.A. report shows the cost of a gallon of regular unleaded will now set you back a mere $2.94, down just over a nickel from last week, and down 77¢ since gas prices hit their peak in the last days of April and again in late June.
Crude Oil Prices Fall As Production Increases And Demand Withers
The news comes as crude oil prices continue to tank. On the international markets, Brent Light Sweet Crude was trading down again Wednesday, flirting with crossing under the $81 per barrel mark. For the domestic benchmark, West Texas Intermediate, the price is off significantly in intraday trading and was closing in on the $77 mark.
The surplus of domestic shale and sluggish demand, both overseas and in the United States, has put crude oil and, consequently, retail gas prices into a downward spiral. The E.I.A. has cut its domestic crude pricing forecast for 2015. The E.I.A. projection for the coming year is that WTI will average about $77.75 per barrel, posed to the original forecast of $94.58. The E.I.A. estimate for Brent has been cut to $83.42 from $101.67.
The E.I.A. administrator, Adam Sieminski, wrote in an email statement that the current growth in the global oil supply, even in the face of weaker consumer demand, will keep crude prices suppressed. Forecasts for U.S. domestic production project an increase in domestic crude output from 8.5-million barrels per day to over 9.4-million next year, the highest domestic crude production since 1970.
Truckers Hit With Surprise Price Hikes
But the current news is unlikely to assuage concerns for truckers, many of whom have been hit with a surprise and costly price increase during the past week. The E.I.A. survey shows price spikes across the Rockies and in the Midwest contributed to a solid increase in the cost of diesel during the past week. Overall, the U.S. average diesel price is up by a nickel, exactly the opposite of the retail gasoline market.
While many regions across the eastern seaboard enjoyed price declines, a stunning 16¢ per gallon increase in prices across the Midwest, coupled with an 8¢ per gallon price hike in the Rockies, all but wiped out positive price points from other survey regions. For truckers making cross-country trips, the weekly price spike is likely to be quite costly.
Perhaps the only good news in the mix, for drivers of diesel-powered engines, is that the Midwest and Rockies generally have volatile price swings, often due to weather. That volatility is likely to drive prices back down over the next week, as crude oil stocks and production remain high.