Month: January 2015

Prices Rise In Midwest And Gulf Coast

The price of gasoline continued to fall during the past week, according to the latest survey from the U.S. Energy Information Administration. The weekly E.I.A. fuel price survey shows the average price of a gallon of regular unleaded is now $2.04, down about three cents from last week. However, the more weighty price declines that have become weekly faire at retail gas stations is slowing. In fact, prices increased in two survey regions, the Midwest and the Gulf Coast.

For drivers across the nation’s midsection, fuel costs nudged upward about two cents per gallon, while prices were up about a penny per gallon along the Gulf Coast. That price increase offset large declines seen along the West Coast, where prices fell another seven cents per gallon during the past week. However, when you factor California into the West Coast, prices only went down about a nickel per gallon. Prices were down about five to six cents across New England and the Mid Atlantic States, and there were much larger declines seen along the Lower Atlantic States, where the average price for gas is now $2.17.

Diesel Continues To Decline, But At Slower Pace

The cost of diesel fell at a more robust pace, compared to its unleaded counterpart, although price declines for diesel have also begun to slow considerably. Prices dropped about seven cents over the past week, slipping to a $2.87 national average. The lowest costs were found across the Gulf Coast and Midwest, where prices were averaging $2.79 and $2.80, respectively. The cost of diesel in much of the New England and Central Atlantic regions remains above $3.00 per gallon, as do prices in California. The broader West Coast region is enjoying prices down at $2.76 per gallon.

Crude Oil Remains Depressed

The price of crude oil continues to remain depressed, both on foreign and domestic exchanges. West Texas Intermediate was trading down on the New York Mercantile Exchange again Tuesday morning, this after attempting to level off during the past week. Prices were down over two percent in early trading. WTI is the domestic crude benchmark.

Meanwhile, Brent Crude was trading down slightly in trading on the Intercontinental Europe Exchange, where futures contracts continue trading below $50.

The decline in both Brent and WTI has resulted from the glut of oil, both due to high production by Middle Eastern nations, particularly Saudi Arabia, and by the tar sands and shale boom in the United States and Canada. The decline in demand overseas, due to a slowing economy, has also contributed to the precipitous decline of crude oil prices.

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National Average Gas Price On Verge Of Going Below $2.00

The cost of a gallon of gasoline kept declining at the rate of a penny per day, on average, during the past week, according to the latest weekly survey from the U.S. Energy Information Administration. The nation’s gas now averages just $2.07 for each gallon of regular unleaded, although prices in many areas are well below $2.00.

The cheapest prices are found along the Gulf Coast, where the average cost of gas is only $1.84, followed fairly closely by the Rocky Mountain survey region, where prices are $1.91 per gallon. The Midwest is averaging $1.92 per gallon. While the remainder of the survey regions have prices above the $2.00 threshold, even the most costly gas, found on the West Coast, is now only $2.38 per gallon.

Gas prices have continued to decline even as crude oil prices have finally leveled off, somewhat. The retail cost of fuels had been following the precipitous decline of crude since the middle of summer, when gas prices were in the high $3.00 ranges, and well over $4.00 in some parts of the country. Such prices seem almost nightmarish in the wake of the today’s cheap prices.

Diesel Slips Below $3.00 Per Gallon

Meanwhile, the price of diesel has slipped under $3.00. The national average for diesel is now just $2.93 per gallon, with some survey regions enjoying prices as low as $2.83, as in some parts of the West Coast, though not in California. The Gulf Coast region has the lowest overall price for diesel, where the prices are averaging about $2.84 per gallon.

Overall, the year-on-year price changes are substantial. For truckers, the cost of a gallon of diesel is about 94¢ less than this time last year. For commuters, the cost of a gallon of regular gas is now $1.23 less than at the start of 2014; however, the price decline since the middle of the summer is even greater.

During the past year, the nation’s average gas price, according to the E.I.A., topped off at $3.71, at the end of April, 2014, and again at $3.70, at the end of June. Those levels are $1.64 and $1.63 higher than the current price average of $2.07. Whether prices will continue falling, however, remains to be seen. The reason is that crude oil prices appear to have halted what had been a calamitous fall since the middle of summer.

Crude Prices Relatively Stable After Disastrous End To ’14

West Texas Intermediate, the domestic crude benchmark, has been hovering between $46 and $50 per barrel since about January 6; Brent, the overseas index, has also been more stable since the 6th of January, trading in a range between $48 and $52 per barrel. However, both indices are still trending slightly lower, albeit at a much slower pace than the latter half of 2014.

The likelihood of crude oil rebounding enough to halt the gas price decline remains uncertain, but at least one OPEC minister told an economic summit meeting in Davos, Switzerland he expected prices to normalize soon. Without providing a timeline, OPEC’s secretary-general, Abdullah al-Badri, said he believed crude prices would begin rising as investment firms scaled back their exposure in future production.

DOWNLOAD THE WEEKLY GAS PRICE SURVEY

Gas Officially Below $2.00 in Midwest and Gulf Coast

The price of a gallon of gas is cheaper than at any time in the past six years, with the official U.S. gas price now down to a mere $2.21 per gallon, off almost nine cents from last week’s price, and down $1.50 since the end of June 2014. The current pricing is detailed in the weekly gas price survey from the U.S. Energy Information Administration.

The regional average gas prices in the Midwest and Gulf Coast states are now officially below $2.00 per gallon, with the Midwest enjoying gas averaging about $1.97 and the Gulf Coast drivers enjoying gasoline at $1.99.

The price of gas continues to follow the track of crude oil, which has collapsed under the weight of strong supply and weak overseas demand. West Texas Intermediate crude, WTI, fell below $50 on Monday, triggering a massive stock market selloff. WTI was trading just over $48 per barrel in early Tuesday trading, and the overseas crude, Brent, was trading just above $51. By comparison, both futures indices were trading well above $100 per barrel over the summer, with Brent pushing past the $110 boundary at one point.

However, domestic oil production in the U.S., combined with high output from OPEC member states, has resulted in a glut of oil at a time when the broader global economy is slowing. The result is high output and lower demand, translating into very low retail gas prices. However, there is consensus among Arab OPEC nations that crude will return to between $70 and $80 per barrel by the end of the 2015.

Anticipating A Crude Oil Rebound

Reuters quoted unnamed OPEC ministers last week, most of whom agree the current decline in prices will stabilize and “find new equilibrium” by the end of the year. The sources told Reuters the reason they expect a turnaround is that they do not foresee the global economy slipping into a new recession, but rather enduring a momentary period of slowdown before growing once more.

In the meantime, the travails of low crude oil prices will remain bad news for producers but good news for American drivers. One motorist in Texas told TurnpikeInfo.com he was able to fill up his small car for only $22, and that was using premium unleaded. For many drivers around the country, the cost of topping off the tank is about 40% lower than it was just six months ago.

Truckers Getting Big Break With Low Diesel Prices

That savings also translates to the hauling industry. Truckers have been enjoying slowly declining diesel prices for nearly a year, with the declines accelerating in recent weeks. As it stands, the average price of a gallon of diesel is now about $3.14, which is about 75¢ less than just a few short months ago. For a tractor-trailer with a 150-gallon tank, that translates into $113 in savings for every fill-up.
Region by region, the area with the highest diesel prices continues to be the New England and Central Atlantic states, where the cost is $3.29 and $3.30, respectively. California has the most expensive diesel at $3.34 per gallon.

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