Domestic Crude Down Almost 50% In Six Months
EDITOR’S NOTE: Our weekly report was not published for the week of December 8, 2014. However, we have the weekly E.I.A. price survey for the week available, and it may be viewed or downloaded.
The price of a gallon of gas has plunged in the past two weeks to record lows for the decade, and prices are poised to go even lower. Commodities experts agree consumers are benefiting from a glut of domestic shale oil and a recent decision by OPEC members not to alter production levels overseas.
As a result the average U.S. consumer is paying almost a quarter per gallon less for gas than just two weeks ago, according to the latest survey from the U.S. Energy Information Administration. The E.I.A. report shows the average U.S. gas price is now $2.55 per gallon, down 13¢ in the past week, which follows a 10¢ decline the week earlier.
The price of gas has declined so substantially that it is now almost 70¢ less than at this time last year, and prices, nationally, are about $1.15 less than just six months ago. That translates to a savings of $17.25 for every 15-gallon fill-up, and it is not just the general public that is benefitting.
Diesel Prices Declining At Faster Pace
After slow-paced price declines for most of the summer and autumn, truckers and fleet operators are realizing a substantial benefit from the lower crude oil prices, which has lead to lower costs for diesel. The average price of a gallon of diesel is down 45¢, year on year, and now averages $3.42 per gallon nationwide. Even in California, where prices remain higher than most states, the cost of diesel is down over 50¢ on the year to $3.55 per gallon.
That kind of a price decline means a substantial savings for the operation of a single tractor-trailer rig, to say nothing of the savings for small to large fleets of trucks. Given the average rig will hold about 250 gallons of diesel, a savings of $125 for every stop quickly aggregates into the thousands-of-dollars range.
Crude Continues Trading In Low $50’s Range
Domestic crude oil, West Texas Intermediate, has been trading in the lower $50 range for the last several days, although prices rebounded somewhat during early Tuesday trading. However, Brent Light Sweet crude, which is the overseas benchmark, was down early Tuesday after OPEC ministers again stated they would not cap production to control pricing.
Meanwhile, the reduced oil prices have touched off global instability in some regions threatened by the lower pricing, particularly unstable African nations, including Libya and Nigeria. In South America, the Venezuelan economy, already feeling a pinch due to civil unrest this year, is poised to suffer setbacks due to a sharp decline in revenues from oil exports.