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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 declinig 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.”

EIA Crude Oil Production Chart

U.S. domestic oil production from 1960 onward. The EIA is predicting domestic prodution will rise to levels not seen since the early 1970’s.

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.


Gas Prices

Download Gas Price Survey

Download the weekly EIA gas price survey.

Gas prices across the U.S. slipped upward about a penny per gallon during the recent week, according to the latest survey from the U.S. Energy Information Administration. The EIA report shows the average price of a gallon of unleaded gas is now about $3.36 per gallon, although many areas are enjoying substantially lower prices, particularly the Gulf Coast states, where the price of gas is about $3.12 per gallon.

The slight uptick in prices goes against the longer-term seasonal trend of lower prices, overall, for most U.S. drivers, and it is not expected to continue, according to a report this week in USA Today. That trend is being driven largely by lower futures prices, which fell below $100 per gallon this week.

Futures prices have been slipping considerably in recent weeks, although periodic price disruptions have caused spikes in futures trades, particularly where it concerns North African and Middle Eastern supplies. But the production of oil elsewhere, particularly in the United States, has helped offset those scares. Refineries are also now producing cheaper grades of gasoline for winter driving, which also contributes to the lower cost of fuel.

For drivers nationwide, the price of gas did, in fact, fall in a number of regions during the past week, including the West Coast and California, the Rocky Mountain states and for drivers in the Central and Lower Atlantic states. The cost of fuel dipped by about 4¢ per gallon across the West Coast, and about 3¢ per gallon across the Rocky Mountain states and New England, regions where the price of gasoline is still hoveing closer to $3.50 per gallon.

For truckers and other drivers of diesel-powered vehicles, the price of fuel was basically flat during the past week. The average U.S. price of diesel fuel was flat this past week, with some regions showing a penny per gallon increase in prices and others showing a dip of a penny. Overall, the average price of diesel is about $3.89 per gallon, which is identical to last week.

Year over year prices continue to provide a longer-term view that augurs great news for drivers in the weeks to come. Some analysits believe the price of gasoline is likely to continue falling through the winter months, driving the price of gas to the lowest levels drivers have enjoyed since 2010. However, that prediction could prove folly if a frigid prediction by Farmer’s Almanac proves true.

Farmer’s Alamanac predicts an especially frigid and wet winter season in the coming months, which means heating oil and natural gas supplies are likely to be strained under heavy demand. If home heating oil demand spikes, the prices in related, broader energy markets could come under pressure to increase.


Gas Prices Keep Rising As Summer Driving Cost Becomes Winter Norm

The cost of a gallon of gas continued its unrelenting march to $4.00 per gallon this week as the average cost for a gallon of regular unleaded fuel reached $3.75, up an average of 11¢ per gallon for each of the past two weeks. The price of a gallon of gas has gone up about 50¢ since Christmas Day, less than two months ago, making the average cost of a fill up about $8.00 more expensive for the average U.S. driver. The price is based on a 16-gallon tank filled from near empty. The price of fuel is detailed in this week’s survey from the Energy Information Administration, a branch of the U.S. Department of Energy.

While the cost of gasoline rises, the cost of diesel fuel has also continued to go up week after week since the start of the year. The average price of a gallon of diesel fuel topped out at $4.33 per gallon, for truckers and diesel car owners driving in New England this week. For the U.S. as a whole, the cost is about $4.16 for each gallon of diesel.

Gas prices

Are we going to see $4-per-gallon gas soon? This picture, taken in May 2011 in Fort Lauderdale, shows prices at their pre-summer peak.

Part of the reason for the summer-time gas costs during February can be traced to a reduction in refinery capacity. Commodities trader Dennis Gartman told CNBC Tuesday, February 19, he believed the current cost of gas was traced to what he called an “extraordinary short squeeze” caused by BP and Hess each taking down large refineries. Gartman said the reduced refining capacity pulled “almost a half a million barrels of crude oil out of the market.” BP’s refinery in Whiting, Indiana is offline for routine maintenance, but the Hess refinery in New Jersey, which was closed in January, is slated to remain offline. That could create longer-term issues for fuel supplies.

The American Automobile Association reported the refinery closures are compounded by the fact crude oil, itself, is at nine-month highs, with Brent crude at over $119 per barrel. But, there is no consensus on just how high gas prices will rise or whether the current uptick in prices will continue at its current pace. Gartman told CNBC’s Fast Money he did not expect the fuel prices to keep going up; however, John Kilduff of Again Capital in New York told reporters Tuesday he would not be surprised if gas prices hit $5.00 per gallon.


Gas Prices for January 14, 2013: East Coast Gas Up, Diesel Prices Down


Fuel price survey

Gas prices across most East Coast and Midwestern states nudged upward slightly during the past week, according to the latest fuel survey by the U.S. Energy Information Agency. The average U.S. price per gallon of Regular Unleaded was at just over $3.30 per gallon, according to the January 14 survey release, up from just under $3.30 last week. Fuel prices for the East Coast and New England were much higher, however, most drivers paying about $3.45 per gallon, a full 15¢ per gallon more than the U.S. Average.


Diesel price survey

Diesel prices, however, nudged down slightly, a good sign for truckers who typically spend well over $4.00 per gallon for fuel, even though diesel is well known to be much more plentiful and easier to refine than gasoline. The East Coast average for a gallon of diesel fuel was just over $4.00 per gallon, with New England states enduring the highest prices for diesel, at $4.17 per gallon.

Download A PDF of the Weekly Survey