Glut Of Oil Pushes Crude Prices Lower
The cost of a gallon of gasoline fell another nickel across the U.S. last week, this according to the latest gas price survey from the U.S. Energy Information Administration. The weekly E.I.A. survey shows the average U.S. cost for a gallon of regular unleaded is now only $2.89, with prices far lower in some regions. For the Gulf Coast, the cheap spot of the nation, a gallon of gas will only set you back $2.67, on average.
Prices continued to fall between three and six cents per gallon across every survey region in the past seven days. Even in California, where prices remained above $4.00 per gallon most of the summer, prices fell nearly 7¢ in the past week to settle at $3.15, nearly $1.00 less than just a few months ago. For many drivers, the retail price declines have been exceptionally beneficial on the wallet, the construction of the last leg of the Keystone XL pipeline has the potential to add to that benefit.
Crude oil prices have continued to plummet in the wake of slowing global demand and an increase in production from the United States. Furthermore, nations belonging to the OPEC cartel have been unable to influence production that would slow the decline in foreign crude prices, and as a result, both domestic and overseas crude remain at multi-year lows. West Texas Intermediate, the domestic benchmark, is at its lowest point since the start of 2009.
Analysts Say Crude Prices Will Remain Low
Meanwhile, new geopolitical risks that might otherwise push up crude prices are likely to only bump futures contracts from time to time, according to a pair of analysts who spoke to Bloomberg last week. Dan Dicker, the senior contributor to Oilprice.com, said he believes the current market will trap crude prices in a narrow range. Scott Bauer, from Trading Advantage, said he believes traders will likely sell contracts that get up to $81 per barrel and reacquire contracts when they fall to $76. As of Tuesday morning, WTI is trading under $75, while Brent Light Sweet Crude is hovering just above $78 per barrel.
Diesel Prices Falling, But Not As Quickly
The good news for the American driver also translates to good news for the American hauler. Truckers have continued to enjoy diesel price declines through the summer and into the fall. The average price of a gallon of diesel fell last week to $3.66. Although there was a slight price bump in the West Coast region, all other regions enjoyed a week-over-week price decline.
The Midwestern states, where diesel prices soared by double digits last week, watched a leveling of prices. The other region hit by last week’s power price surge was the Rocky Mountain states, where prices fell three cents this week. Overall, however, diesel prices remain anywhere from 70 to 80 cents per gallon higher than unleaded gas.