Gas Prices Dip Slightly, But Diesel Spikes Amid Winter Woes

Truckers And Haulers Bear Brunt Of Winter Price Increases Weekly U.S. price trend

The price of gas barely moved during the past week, with the average U.S. price of a gallon of regular unleaded falling about a penny to $3.29, although the cost of fuel along the East Coast did fall about two cents per gallon.

Price increases of about one to two cents in the Midwest offset the East Coast declines to keep the U.S. average from falling any further. The figures are detailed in the regular weekly gas price survey released by the Energy Information Administration.

Meanwhile, truckers felt a torrent of increases in prices at the pump, with the national average of the price of diesel rising almost five cents per gallon. But in the Northeast and along the Central Atlantic, which have been hard hit by winter storms of late, the cost of a gallon of diesel rose as much as 14 cents per gallon in one week.

For truckers and other haulers, the price increases were a grim reminder of the volatility of diesel prices during the winter season, when refineries can sometimes struggle to keep up with demand for home heating oil, propane and natural gas.

Old Man Winter Pushes Distillate Demand Up By 500,000 Barrels Per Day

The EIA reported that demand for distillate consumption, a category of fuels that includes heating oil, had risen ballistically in the past four weeks. As of the end of January, refineries were pushing out an extra half-million barrels per day of distillate fuels. The EIA has further reported that inventories of distillates fell nearly 20% through January 24, with additional declines in inventory expected through the week as a new bluster of winter weather buries the Plains, the Midwest and the Northeast.

Blizzard
Apocalyptic winter weather conditions are playing havoc on diesel prices as much as they are causing treacherous driving conditions. Photo: PhotoDune.net for TurnpikeInfo.com.

The rise in diesel prices has been met with even higher surges in heating oil and propane costs. Home heating oil rose about 12¢ per gallon during the week last week, but propane prices soard by $1.05 per gallon last week, the biggest one-week increase since 1990, the EIA reported.

Taken in the aggregate, the surge in demand and the corresponding increase in prices has meant drivers of diesel vehicles, particularly truckers, have suffered a hard hit at the pump.

Futures Prices Creeping Higher, Particularly For West Texas Intermediate

Meanwhile, futures  prices have been creeping higher during the past week. Contracts for West Texas Intermediate, for early March delivery, have been slowly edging toward the $100 per barrel mark, a dubious milestone not seen since the end of December. Prices have been hovering  between $96.67 and $98.07 per barrel for the past several days, although prices at mid-week were down slightly.

For Brent Light Sweet Crude, the news is slightly different, with the benchmark’s intercontinental exhanges hovering in a narrow range near $106 for the past several days.

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Editor's Note: The original story reflected the national average price of a gallon of gas at $3.30 per gallon, which was incorrect for the week of February 3. The price has been corrected to $3.29 per gallon.

Gas Prices Are Coming Down, Barely

Gas Prices Level Off For Most, Rise In Midwest Weekly U.S. gas price trend

The price of gasoline across the U.S. barely moved from it’s $3.30 national average during the past week, although some people across the East Coast and New England are paying noticeably less for fuel, according to the latest survey from the U.S. Energy Information Administration.

The EIA report shows the average price of a gallon of unleaded, including all taxes, remained at about $3.30 this week, while the cost of driving, as measured by the price at the pump, did come down almost 3¢ per gallon for New Enganders and about a penny per gallon for most of the rest of the East Coast. West Coast drivers also enjoyed a slight reprieve, but the volatile Midwest markets had a 2¢ per gallon increase in the price of gas.

Shipping Gets More Expensive As Truckers Pay More

Trucks on a high level bridge 02The price of diesel took an different path during the past week, primarily because refineries are being forced to devote additional resources to meet the winter demand for propane and natural gas.

The diversion contributed to a mid-winter price spike in diesel, with the cost of a gallon of shooting up over 3¢ per gallon during the past week, with the national average now at $3.90 per gallon. That figure is fairly deceptive, however, with truckers in many states paying as much as $4.17 per gallon, on average, for diesel.

While the Farmer’s Almanac predicted the 2014 Winter would be particularly brutal, the spate of winter storms crossing through the Great Lakes states and the Northeast seems to have caught fuel suppliers off guard, nonetheless. The current price of a fill-up for a tractor-trailer, with two 150-gallon tanks, is now as high as $1251.00 in some areas.

Long-term Trend Still Shows Prices Falling

Despite the December and early January upward run in costs, the prices of gas and diesel are still lower now that at the start of 2013. The U.S. average for a gallon of unleaded was about $3.36 at this time last year, while a gallon of diesel was about $3.93.

While prices are projected to continue falling through 2014, the start of the year has been  more costly for drivers. Prices are, on average, 21¢ per gallon higher than they were just over two months ago. For  truckers, the news isn’t quite as bad, with diesel up about 8¢ per gallon over the past two months.

Crude Oil Prices Fluctuating, But Not As Wildly As November and December

Crude oil prices have stabilized from their wild swings over the previous two months, although some instability lingers. The price of the benchmark Brent Light Sweet Crude has come off its December highs, but the index continues to trade in a narrow range between $106 and $109 per barrel. Prices have stabilized primarily because of reduced geopolitical tensions in Libya and the Eastern Mediterranean.

The Libyan situation, in particular, has helped cap Brent prices, with supplies flowing at higher levels, although still not at their projected capacity.

Meanwhile, the cost of West Texas Intermediate continues to be quite volatile. WTI has been as low as $91.78, on January 13, and as high as  $97.35, where it closed only ten days later. WTI is currently trading in the lower $90’s, and prices on early Wednesday were hovering around $94 per barrel.

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Gas Prices Do About Face And Decline As Diesel Begins To Cost More

Drivers Enjoy Break In Price Increases 2014-01-20-trend

For the first time in several weeks, the price of gasoline finally began to decline, but the news for truckers was mixed during the past week, according to the latest survey from the U.S. Energy Information Administration. The average price of a gallon of unleaded fuel slipped downward just over 3¢ per gallon during the past week, according to the survey report, which was delayed this week for the Martin Luther King, Jr. Holiday.

The average price of gas fell to $3.30 per gallon, and while the nationwide average cost of diesel fell about a penny, the cost of diesel went up between 1¢ and 2¢ per gallon across the East Coast, New England and the Central and Lower Atlantic regions.

 Unleaded Costing Less Across All Regions

The price of unleaded dipped in every region of the U.S., although the declines were barely noticeable for drivers along the Gulf Coast and the West Coast of the U.S. For California, however, prices dipped as much as a nickel per gallon.

The biggest price decline came in the  Midwest region, which is known for wild price swings from one week to the next. Drivers across Michigan, Indiana, Iowa and Illinois felt prices drop just over a nickel per gallon, although the arrival of new winter storms this week has brought new problems at the pump, as refineries shift gears and try to meet an almost extreme demand for propane, the preferred heating fuel for many households in the Midwest.

Across the East Coast, New England and Atlantic States, the price of a fill-up dropped as much as 4¢ per gallon, although the Lower Atlantic states, barely saw prices move, in line with the neighboring Gulf Coast region.

Increased Demand Forecast Pushes WTI Crude Higher

While the forecast for gas prices is a long-term trend toward lower costs, the price of U.S. crude oil has been on a wild swing during the past two months, starting with dramatic price declines ahead of Thanksgiving 2013 that were completely reversed by the middle of December.

The volatile West Texas Intermediate futures closed at over $95 per barrel Tuesday as the International Energy Agency – not to be confused with the U.S. Energy Information Administration – announced global crude oil demand would increase by 1.3-million barrels per day this year, about 50,000 barrels per day more than originally expected.

The increase in global demand has put upward price pressure on WTI,  which is also under trading pressure as February contracts begin to expire. Traders are buying additional contracts to cover their positions ahead of those contract expirations, according to a financial report on CNBC.com.

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Gas Prices Officially Remain Flat, But Price Declines Greeting Many Drivers

2014 Starts Out More Expensive Than 2013

weekly gas prices
Weekly gas price trend for the U.S.

The price of a gallon of gasoline remained fairly flat during the past, on a nationwide level, according to the latest weekly survey from the U.S. Energy Information Administration. The EIA report shows the average price of a gallon of unleaded is just under $3.33 per gallon, although as a practical measure, the price of fuel stayed pretty much the same from one week to the next.

However, regional price shifts tell a radically different story, with some areas paying several cents more per gallon and others paying a few cents less.

Midwest and Rockies Endure Price Increases, Particularly Year Over Year

The cost of driving did get a little more expensive for people living in the Midwest and Rocky Mountain states, with the price of fuel going up about 3¢ per gallon in both regions, underscoring the pricing volatility that can be experienced from one region to the next and on a nearly daily basis.

The Midwest, for instance, has suffered wild pricing swings over the past month that have made budgeting for gasoline difficult for most drivers. Stations are charging, on average, about $3.25 per gallon across the Midwest, which is about where prices were two weeks ago. After a one-week respite, Midwesterners are paying almost as much as they were at the end of December, when sudden week-over-week inflation brought the price of gas in the heartland to fresh highs for 2013.

Indeed, with the recent spate of price swings in the Midwest, drivers across the region are paying about 10¢ per gallon more than at this time last year. However, that number is not nearly as severe as those living in the Rocky Mountain states.

The average price of gas across states like Idaho, Montana and Colorado may be less than in the Midwest, at $3.15 per gallon, but that figure is over 28¢ per gallon higher than January 2013. While most of the rest of the nation is paying about 2¢ to 3¢ more per gallon this year, the Midwest and Rockies have been hit hardest by the year-over-year price increases.

EIA Predicts Strong Crude Supply Will Bring Prices Down

The Energy Information Adminstration continues to forecast lower prices through 2014, however, despite the rocky start to the year. Typically, gas prices do begin a calendar year slightly higher because refineries are holding back on new inventories to avoid year-end taxes they would have to pay on stored supplies.

Prices generally fall through January and into the start of February. But the EIA is predicting prices will continue declining through 2014 and, potentially, 2015, with a strong domestic crude oil supply bolstering import supplies.

The weekly petroleum summary from the government forecasts domestic crude oil production to reach levels that have not been seen since the Nixon Administration.

“EIA projects crude oil production to average 8.5 million bbl/d in 2014 and 9.3 million bbl/d in 2015, which would be the highest annual rate of crude oil production since 1972,” the agency has reported. “Production from tight oil formations in Texas, North Dakota, and a handful of other states has driven total crude oil production growth for the past four years. Development activity in these key onshore basins and increasing productivity as companies learn how to apply hydraulic fracturing techniques more effectively and efficiently are central to [the] Short-term Energy Outlook forecast.”

Crude Futures Mixed Overseas And Domestically

The EIA report has had little impact on crude futures markets, which have responded in recent months to political unrest in Libya and Syria, driving the cost of Brent Light Sweet Crude higher. Potential resolutions to the Iranian nuclear refinement programs has kept pricing pressure at bay, however, with the potential for new supplies fairly good, if negotiations go well. New talks between world powers and Tehran are expected to continue in Geneva next month.

The political unrest that has kept Libya’s crude production low, at about 300,000 barrels per day, has finally begun to ease. That has helped production double to about 600,000 bbl/d in the past couple weeks, but that level is about half the production that was being output in July 2013.

Prices of West Texas Intermediate augur the best potential for lower gas prices in the immediate future, at least for North America. WTI had spiked in December, closing over $100 per barrel, but prices for February delivery have fallen considerably in the past week, closing Monday at $91.54 per barrel.

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Gas Prices Start 2014 With An Edge Higher

National Average Remains Nearly The Same, But Regional Prices Increase

weekly gas prices
Weekly gas price trend for the U.S.

The price of a gallon of gas remained flat across many regions of the United States during the past week, according to the latest survey from the U.S. Energy Information Administration. However, the national average, which remains at about $3.33 per gallon, hardly tells the story for most areas, including the West Coast and New England, where prices edged higher by about two cents.

For the broader East Coast and the Lower Atlantic states, the price of gasoline nudged higher by more than 3¢ per gallon. It was the Midwest region’s 4¢ per gallon price decline that tempered the increase in the national averages.

The result is what appears to be a flat week-over-week price point, even though most Americans are paying higher gas prices.

Midwest Prices Ease After Major Hike In Recent Weeks

The cost of fuel in the Midwest dipped by an average of 4¢ per gallon during the past week, helping ameliorate a nasty series of price increases, particularly last week, which had troubled the region during the holidays.

The price of fuel across the nation’s heartland was about $3.07 in the middle of December, but it ended 2013 with average prices having soared to $3.26, and higher in some areas across the midwest. The current average has slipped downward to $3.22.

Diesel Prices Nudge Higher

The price of diesel also remained nearly flat across the nation during the past week, although the average price per gallon did go up, from $3.90 to $3.91. However, extreme pricing can still be found in the New England states and California, where the average price in both regions is currently $4.12.  The cheapest price for diesel is still found across the Gulf Coast states.

2014 Gas More Expensive Than 2013, But Diesel Is Mostly Cheaper

The price of gas, while declining for many months at the end of 2013, ended the year higher. Consumer gas prices for many drivers are starting 2014 higher than they were last year, and this is particularly true across the Rocky Mountain region, where the price of regular unleaded gas is 19¢ per gallon higher than at this time one year ago. For truckers in the Rockies, the price of diesel is 21¢ higher, per gallon.

The Rocky Mountain price averages are extreme examples, however, as most Americans, while paying higher prices for gas, are only paying a few cents more per gallon as 2014 starts, versus 2013. Drivers across the Gulf Coast and the Lower Atlantic states are actually paying less, compared with last year.

Diesel drivers are also paying less; in fact, diesel prices across the East Coast and Lower Atlantic states are upwards of 6¢ per gallon less; however, truckers and other diesel car drivers in California are paying as much as 7¢ per gallon more, demonstrating a broad disparity in the distribution of gas prices, from state to state and region to region.

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Gas Prices Surge To End 2013 Higher

AVERAGE PRICES SURGE 15¢ IN 2013’S FINAL WEEKS

gas price trend
Weekly gas price trends in the United States.

The price of a gallon gas spiked at the end of 2014, according to the weekly gas price survey from the Energy Information Administration. The EIA report shows the price of a gallon of regular unleaded jumped over 6¢ per gallon in the last week of December, ending the month the same way November concluded: with a shockingly high rise consumer costs.

December’s month-end price spike was lower than last month, but the national average for a price of a gallon of gas, now at $3.33, is fully 15¢ higher than the low point on November 18 and 5¢ above where December started.

MIDWEST PUMMELED BY ICE STORMS AND HIGHER COSTS

The news across the Midwestern states has been dominated by the ice storms that ravaged the area during the past week, but the soaring cost of gas added insult to injury in the region. The price of gas hit $3.26 per gallon during the past week, up more than 10-cents from the previous week. While regular pricing volatility in the region has been known to cause wild price swings, the supply disruptions caused by winter storms has not helped the situaton.

Ice storms may have been partly to blame for a power outage at an ExxonMobil refinery in Joliet, Illinois; and MLive.com is also reporting this week that there were problems at a Phillips 66 refinery in Roxana, Illinois. The refinery issues in Illinois are believed to have been a significant factor in a consumer pricing lurch in Michigan, where the average price of gas soared more than 16¢ per gallon during the past week, the highest of any U.S. state.

TAXES, POLITICAL STRIFE AND TRAIN ACCIDENTS ADD TO WOES

A spate of year-ending issues are adding to the maelstrom of gas price hikes, including growing political problems overseas, particularly in South Sudan, where major oil pipeline supplies have been disrupted. That has caused Brent Light Sweed crude to soar in the past month, and that has also dragged the price of West Texas Intermediate crude with it.

The year end tax question also provides a partial answer to why fuel prices are leaping through the proverbial roof. Petroleum distributors and oil companies have to pay taxes on the supplies they have in stock at the end of the year, so supplies begin to evaporate ahead of the new year. Pricing generally peaks in the first week of January, following such a supply choke hold, only to fall by the middle and later part of the month.

Unfortunately for drivers, a crude oil supply train in North Dakota derailed and exploded Monday, with about 20 cars believed to have caught fire and burned, according to a spokesman for the BNSF Railway Company. The oil train derailed shortly after 2 p.m. Monday, forcing an evacuation of nearby Casselton, North Dakota. No injuries or deaths were recorded.

It is unknown how the North Dakota train accident will impact crude oil prices going forward, but the futures markets have been particularly sensitive in recent weeks to supply problems. The Sudanese situation, coupled with continuing political and civil strikes in Libya, have caused Brent to reach highs not seen since March 2012, while the WTI has traded above $100 per barrel during recent sessions.

Brent closed Monday at $111.21 after edging closer to the $113 per barrel mark in recent days, while WTI finally came down slightly, closing at $98.64 per barrel Monday.

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Gas Prices Pumped Up For Christmas

Prices Surge In Midwest, Pushing National Average Higher

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Dowload EIA report.

The price of a gallon of unleaded gasoline starting going up again, for nearly everyone in the United States, during the past week, breaking a brief downward trend that provided a respite for drivers. Just in time for the Christmas holiday, the Energy Information Administration’s latest survey shows the price of gas wrapped the week higher, moving up to $3.27 per gallon, erasing the price gains consumers had enjoyed at the pump just last week. Only the West Coast and Rocky Mountain states fared well last week, as prices remained flat in those regions.

Midwest Gets Hit With Price Volatility

Gas prices spiked across the Midwest, with surges over 8¢ per gallon in many areas, and higher in some. The average price of a gallon gas jumped from $3.08 to $3.16 during the past week. While winter weather may have contributed to the surge in prices, the more likely cause is the pricing volatility that can sometimes affect the Midwestern states.

Indiana Public Media reported just last month that profit margins at stations in some cities are half what they are in other regions of the United States. The executive director of the Indiana Petroleum Marketers and Convenience Store Association, Scot Imus, told indianapublicmedia.org some stations even sell gasoline below cost so they do not lose customers, but the flip side is the prices can often swing quickly — sometimes within an hour — to the upside.

Crude Prices Keep Rising Amid New Geopolitical Uncertainty

Texas toll roads
Whether commuting or traveling long distance, from Texas to New England, the cost of driving started going up again during this past week. This shot was taken near Round Rock, Texas.

The price of crude oil continued its stratospheric reach during the past week, particularly with  West Texas Intermediate futures, which were closing in on $100 per barrel during the past week.

The price of WTI had been as low as $93 per barrel at Thanksgiving, but the cost of January deliveries has exploded on the trading floor, this as investors fear supply disruptions of Brent Light Sweet crude, which is being affected by political unrest overseas.

Brent, meanwhile, continued hovering around $112 per barrel in thin trading ahead of the actual Christmas holiday. The price point is not only a high for December but all of 2013, and overall, prolonged price trades of Brent have not been this high since March 2012.

The overseas instability in Libya persisted during the past week, despite assurances last week that supplies would begin returning to normal levels. Add to that new problems in South Sudan, where political instability has continued to plague the new nation and the economic infrastructure, or lack of it, inside the nation’s borders.

A dispute over an oil pipeline that is shared with North Sudan, plus the potential for internal political strife within South Sudan, have resulted in a reduction of daily supply. Currently, the production of crude in the two Sudans is down about 45,000 barrels per day.

Diesel Prices Remain Flat Amid Gas Price Fluctuations

The pricing volatility that has affected both crude oil and the consumer gas prices does not appear to be impacting diesel fuel prices, according to the weekly EIA report. Prices for most regions were flat to just higher, with the Central Atlantic states paying a penny per gallon more this week than last. However, the broad U.S. average price for a gallon of diesel remains around $3.87 per gallon, the same as last week and about a penny per gallon less than reported two weeks ago.

However, the news may not remain so pleasant for diesel drivers, particularly truckers, who have to buy large volumes of fuel. The price of diesel typically lags behind the trend for gasoline, according the EIA 2013 surveys. If that trend holds through the holiday, truckers are likely to see their fuel costs increasing just ahead of the New Year.

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Gas Prices Finally Ease After Thanksgiving Price Surge

Prices Turn Downward, Although Crude Remains Higher

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Gas prices across the United States continued to relax during the past week, this following a month-long price surge that peaked in the days immediately surrounding the Thanksgiving holiday.

The average price of a gallon of regular unleaded gas, at the national level, is now $3.24, although drivers in some regions are enjoying $3.00 gas. The lowest official price, according to the weekly gas price survey from the Energy Information Administration, is $3.05, along the Gulf Coast.

Prices in the New England states and across the Central Atlantic actually rose by about a penny per gallon, according to this week’s EIA report. Prices in California and across the broader West Coast region were primarily flat, although some price declines were seen in scattered areas. The biggest price drops, during the past week, were in the Midwest and Gulf Coast, where prices were down by over 5¢ in each region.

For truckers, the news about this week’s diesel prices is more tempered. Diesel prices across the U.S. declined by about a penny in many regions, although for most drivers, prices were fairly flat, week over week. The price of a gallon of diesel, nationally,  fell from $3.88 last week to $3.87 this week. 

Prices Remain Above Seasonal Lows

For drivers nationwide, gas prices remain above their November 11 low, when the nationwide average had fallen to about $3.19 per gallon. In many regions, the price was well below $3.00, with the Gulf Coast enjoying the lowest prices of all regions, at $2.98. However, prices began ticking upward the following week, only to surge over the Thanksgiving holiday and in the days afterward.

The volatility in prices came from a number of sources, from geopolitical conflicts in Africa and the Middle East, to refinery issues in the United States. Futures prices jumped dramatically the week following Thanksgiving.

The price of West Texas Intermediate has slipped  from its high on December 10, when prices reached $98.67 per barrel, for January delivery. The WTI remained above $97 per barrel on Tuesday afternoon, and prices are well above their low of $92.36, on November 27.

Brent Light Sweet Crude, meanwhile, remains near $110 per barrel, having come off its early-December peak of $112.24, the highest it had been in 18 months. Brent, as a benchmark commodity, peaked about one week before dragging the WTI with it, in a speculative upturn driven by the lingering political instability in Libya and a dramatic decline in crude inventories at the start of the month.

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Gas Prices Hold Steady, Officially, As Crude Keeps Rising

Prices Take A Breather, But It Could Be A Short Pause

Gas prices at Florida station
The price of regular unleaded jumped 10¢ in one day at this Florida station.

The price of consumer gasoline leveled off in most areas during the past week, although the Gulf Coast and Rocky Mountain regions experienced a decline in gas prices of two and four cents, respectively. Overall, however, the change in the price of unleaded gas was negligable, providing a cooling off period, of sorts, in the wake of heated price increases the previous week.

For the current survey period, the average price of a gallon of regular unleaded was flat, at $3.27, according to the latest weekly survey from the Energy Information Administration. The price of diesel was also flat, nationwide, while drivers on the West Coast did experience a slight dip in per gallon prices, about two cents.

Stability In Prices Not Likely To Last

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The relief from rising gas prices is not likely to endure, however, as crude oil prices continue to spike and refinery inventories shrink ahead of the Christmas holiday.

October and early November’s trend toward seasonal and yearly low prices came to an about-face over the Thanksgiving weekend amid geopolitical problems in Libya, primarily a prolonged strike has prevented oil supplies from being loaded on transports. Word from political leaders in the North African nation Tuesday was that oil shipments could resume this weekend, perhaps on Sunday.

Crude Prices Up, Inventories Down

WTI Chart from CNBC
WTI crude oil futures have risen dramatically during the past ten days, closing in on $99 and narrowing a gap with Brent.

In the United States, a decline in crude oil inventories caught many industry analysts off guard, as inventories shrank by more than twice the expected rate during the past week, according to the American Petroleum Institute. The API report showed crude inventories dropped by about 7.5 million barrels during the week ending December 6; the forecast had been for a 3-million barrel decline.

Political instability abroad and declining crude supplies domestically have taken their toll on the futures markets, which TurnpikeInfo.com reported last week had begun to spike. West Texas Intermediate has been the most volatile, falling to a low of about $93 per barrel the day before Thanksgiving, only to go ballistic last week.

The price of WTI moved closer to $99 Tuesday afternoon, althoug the price remained under that threshold at $98.54. Meanwhile, Brent Light Sweet Crude came off its highs last week; Brent is currently at just under $110 per barrel.

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Gas Prices Level Off In Some Areas, Top Off In Others

Gas Prices Are Mixed As Diesel Prices Begin A New Surge

March 11, 2013 gas prices
Gas prices could be heading higher than government forecasters expect as Brent crude oil prices flirt with levels not seen since March 2012. Strikes in Libya and other supply disruptions have pushed Brent well past $112 per barrel, dragging WTI futures for January with it. WTI closed north of $96 per barrel Tuesday.

The recent upward turnaround in gas prices has begun to do another about-face, although the rise in fuel costs for some has continued past the Thanksgiving travel period. The lingering high prices and price increases continued to affect mainly the East Coast region, while most other areas saw prices level off or return to the declines that were enjoyed during October and the start of November. The declines may not last, however, if futures prices continue their unabashed escalation.

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The latest weekly survey from the U.S. Energy Information Administration shows the average price of a gallon of unleaded gas is now at $3.27, down from $3.29 last week but still six cents higher than the seasonal and yearly low that was enjoyed two weeks ago.
The average price of diesel continued upward, and at a more brisk pace, during the past week. The average price of a gallon of fuel is now costing truckers $3.88 at the national level, but regional prices are as high as $4.06. Drivers in New England, broadly, in the east and California, specifically, on the west coast were paying the highest prices. The lowest diesel prices were to be found on the Gulf Coast, but prices there are still averaging about $3.78 per gallon.

Crude Oil Could Be Grinch That Steals Christmas

The price of crude oil has been quite mixed lately, and Brent crude has been heavily influenced by supply problems originating in Libya. An EIA report issued just before the Thanksgiving holiday showed the continued strikes at loading ports have depressed Libyan crude supplies by about one million barrels per day. Indeed, the price of Brent has remained above $110 per barrel since November 21, peaking at prices not seen since August, when other supply disruptions in Libya affected the price of overseas crude.

Gas station sign in Breezewood
Breezewood, Pennsylvania in May 2012, two months after the Brent futures’ last mad dash into territory above $112.

However, the markets took a new turn Tuesday afternoon as when Brent crude closed significantly above $112 for the first time since early 2012. Tuesday trading at the New York Mercantile Exchange brought a fresh price levels and pressures as the benchmark commodity flirted with the $113 level before retreating some later in the day. Brent crude has only been that at that level or higher on three brief occasions in the past three years, with March 2012 being the last time the commodity has priced so high. The cost of gas at the pump, during the late spring of 2012, reflected that pricing pressure.

Domestic crude, West Texas Intermediate, has also been under price pressure of late, and Tuesday’s trading session pushed the WTI dramatically higher in the wake of Brent’s Monday and Tuesday closings. WTI for January delivery swelled well past $96. WTI had been on a longer-term downward trend, closing even as low as $91.77 per barrel the day before Thanksgiving.

The price of WTI on the New York Mercantile Exchange was at $96.12 per barrel on Tuesday afternoon, just at 4 p.m., the first time since Halloween prices have been so high, and an increase of $4.35 per barrel, or about 5%, in just three trading sessions since the holiday.

Nevertheless, the EIA has maintained its forecast that January 2014 prices will rise, but only as a short-term event as season supply and refinery adjustments are made. The longer-term forecast is for consumer prices of gas to continue sliding lower during 2014. However, prolonged supply issues in Libya and Europe could impel traders to drive futures further upward, which is not originally a part of the EIA forecast.

The price disruptions on the futures markets, as have happened in the past few days, are not likely to leave consumers unaffected. The questions only will be whether crude prices level off, and if they do not, will retailers hold off hiking prices until after the holiday season? If retail distributors and operators anticipate significant supply cost increases in January, they could begin raising prices weeks before January deliveries get underway.

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