Gas Prices Still Heading Downward

Over the past two or three months, we’ve seen wild fluctuations in the economy, stock markets, and commodity markets.  People have been spooked that austerity measures will hurt the worldwide economic recovery (which, I would argue, never really started), which, in turn, would drive down consumer spending and demand for pretty much everything.

This, of course, affected the price of both oil and gasoline, as you can see in the chart below:

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As you can see, this chart (courtesy of shows pretty wild fluctuations in the price of both oil and gasoline, with the most “violent” fluctuations occurring in the price of oil.  That being said, at least the general direction of both prices is downward.

As of this morning, oil futures were trading at $75.70, and the national average price of a gallon of regular unleaded gasoline stood at $2.72, which is down one cent from where it was last month, and exactly where it was one week ago.

Currently, only Hawaii ($3.45), Alaska ($3.38), California ($3.09), and Washington, D.C. ($3.06) are reporting average gas prices above $3 per gallon.  South Carolina currently has the lowest average price, at $2.40 per gallon.

Since we’re currently at the peak of summer driving season, it’s hard to envision a scenario where we could see gasoline prices spike higher from current levels.  That being said, a rough hurricane season or a major impact from the offshore drilling moratorium could change things and are worth keeping an eye on.

Oil Dips Below $70 Then Rallies

The price of a barrel of crude oil dropped below $70 yesterday afternoon in intra-day trading for the first time since late February thanks to continued concerns over both the European debt crisis and weaker than expected demand.

However, as the U.S. stock markets rallied to end the session in positive territory, the price of oil finished slightly over $70 per barrel.  In trading this morning, the price of oil has climbed to $71.64 per barrel.

Despite this morning’s small rally, the price of oil has fallen significantly over the last two weeks after hitting a nearly two-year high of $87.15 per barrel on May 3.

The corresponding response from gasoline prices has been relatively muted, with prices falling from $2.94 per gallon on May 5, to this morning’s price of $2.87 per gallon.  However, since we are nearing the start of the busy summer driving season, I suppose this makes sense.

Currently there are nine states reporting an average gasoline price above $3 per gallon, with Alaska reporting the highest price at $3.59 per gallon.  Oklahoma has the lowest state-wide average price at $2.65 per gallon.

Not so Fast for $3 Gasoline?

Turns out I may need to eat my words, because now it’s starting to look like $3 gasoline — this year — might not be so inevitable after all.

Thanks to the European debt crisis, over the past two weeks the price of oil has fallen nearly 16% from its 18 month highs, while the U.S. dollar has substantially strengthened in value against most other currencies.  These two things bode well for falling gasoline prices.

These factors have yet to make a big difference in the price you pay at the pump, however, since the price of gasoline is down three cents over the past week — from $2.92 to $2.89 — as we head into the busy Memorial Day summer kick-off, it’s obvious these factors are starting to have an effect.

Before we get too happy about maybe not having to deal with $3 gas in the near-term, it should be pointed out that the current price of gasoline is still 62 cents, or roughly 27% higher, than where we were at this point last year.

Currently there are ten states reporting an average price of gasoline above $3 per gallon, with Alaska reporting the highest price at $3.59 per gallon.  Colorado is reporting the lowest average price at $2.70 per gallon.

So, where do you think gasoline prices are headed?  Leave your comments below.

The Inevitability of $3 Gas

The national average price of a gallon of regular unleaded gasoline continued to climb overnight, and now stands at $2.88 per gallon.

With the busy summer driving season rapidly approaching and more people buying into the economic recovery — I think it’s just a head fake before the second leg down — it now appears that it is only a matter of time before the price of gasoline climbs back over the psychologically important barrier of $3 per gallon.

Today’s price of $2.88 is only slightly higher than a week ago ($2.86), and not much higher than a month ago ($2.80).  However, today’s price is over 40% higher than a year ago ($2.04) when we were still wondering if the financial system and the economy were about to collapse.

While the national average price of gasoline might be below $3, that certainly doesn’t mean some parts of the country haven’t already crossed that threshold.  Nine states and Washington, D.C., have an average price above $3 per gallon, with Hawaii having the most expensive gas at $3.65 per gallon.

Conversely, there are still several states that are well below the national average, with New Jersey reporting the lowest average price at $2.66 per gallon.

If the economy continues to show signs of improvement, and inflationary pressures on energy prices continue to increase, I think it’s fair to say we’ll all be sharing in the pain of $3 gas by Memorial Day weekend.

Oil Above $80 While Price of Gasoline Remains Flat

The trading price of a barrel of oil climbed above $80 for the first time since early January based on the believe that the United States Federal Reserve will be forced to keep its key federal funds rate at record lows for an extended period of time.

The Federal Reserve will likely have to keep interest rates low in an attempt to help keep credit expenses down for consumers while helping to allow businesses to cheaply borrow money to begin bringing down the unemployment rate.

A low federal funds rate often aids in economic expansion, which in turn, puts upward pressure on the price of commodities, especially things like oil and gold, due to the increased expectation of inflation and devaluing of the dollar.  In international trading, the price of oil is valued in dollars.

Despite the nearly 15% increase in the price of oil over the past two weeks, the price of gasoline has remained relatively flat, jumping less than one percent (two cents) over the same time frame.

However, with climbing oil prices and the busy summer driving season not that far away it seems a near certainty that the price of gasoline will climb significantly higher in the weeks to come.  In fact, it’s not a stretch to assume that this summer most of us will be paying $3 or more per gallon.

Currently, only Alaska ($3.25) and Hawaii ($3.37) are reporting state-wide average prices above $3 per gallon.  Wyoming has the lowest state-wide average price of gasoline at $2.37 per gallon.

What are your thoughts on where the price of gasoline is headed?  Leave your comments below.

The Days of $2 Gasoline Coming to an End

Don’t look now, but after spending the past two months fluctuating between $2.58 and $2.66 per gallon, the price of gasoline is now quickly approaching the psychologically important $3 mark.

According to, the average price of a gallon of regular unleaded gasoline has climbed to $2.72. The last time prices were this high was back in October 2008.

Today’s price is roughly 3% higher than a month ago ($2.64) and a staggering 54.5% higher than a year ago ($1.76).

Currently, three states are reporting an average price above $3 per gallon – California ($3.02); Alaska ($3.34); and Hawaii ($3.43) – while three other states are reporting an average price below $2.50 per gallon – Colorado ($2.47); Utah ($2.49); and Wyoming ($2.49).

Much of the recent rise in the price of gasoline can be attributed to the run up in the price of oil, which, in the face of a strengthening dollar, has climbed from roughly $69 per barrel mid-December to today’s price of nearly $83 per barrel.

As I stated in my recent post “3 Reasons Why Gasoline is Going to $5 a Gallon,” I’m fully convinced gasoline prices are going to head much higher in the near future. What are your thoughts? Leave a comment below!

Higher Gas Prices – The Downside of an Improving Economy

Over the past three weeks there have been several major indicators that “The Great Recession” is finally starting to ease and turn the corner.

First, the Case-Shiller index showed the first month-over-month increase in home prices, the first such increase in nearly three years.  In other housing related news, sales of existing homes climbed for the third straight month.

Then there was the better than expected preliminary reading on the second quarter GDP, which showed the economy dipped at only a 1% annual pace between April and June.  Economist had been expecting the second quarter GDP to decline at 1.5%.

Finally, this past Friday, the July job report showed the economy lost “only” 247,000 jobs and unemployment actually dipped from 9.5% to 9.4%, the first such dip in 19 months.  Again, economists were expecting things to get worse, predicting unemployment would jump to 9.6%.

This is the sort of data we need to see on a consistent basis in order to know the economy has finally turned the corner and that this recession — the longest since WWII — is finally over.

That being said, it’s not as if this economic turn around won’t come without a little bit of pain, namely higher oil and gasoline prices.

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Price of Gas Back Above $2

The average price of gasoline has climbed above the $2 mark yesterday, marking the first time since mid November 2008 that gas prices have been so “high.”  Since the the first of the year the price of gasoline has risen 25%, or roughly 40 cents per gallon, and chances are pretty good prices will continue a gradual climb through the summer months.

Currently 27 states and Washington, D.C. are reporting an average gas price above $2 per gallon, with Hawaii being the most expensive at $2.50.  Utah currently has the lowest state-wide average price at $1.79 per gallon.

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Gas Prices Creeping Back to $2

One of the few silver linings of our currently pitch black economic cloud was the fact that the price of gas had fallen from this summer’s record highs to levels not seen in over five years.  For those of us struggling to make ends meet, the quick decline in the price of gas couldn’t have been better news.

Unfortunately, it looks like the break on gas prices may end up being short-lived.

Since the first of the year, the national average price of a gallon of regular unleaded gasoline has climbed nearly 20% — from $1.61 to $1.92 — and with the summer driving season right around the corner, it seems unavoidable that prices will climb even higher.

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Have Falling Gas Prices Affected Your Lifestyle?

Falling gasoline prices have come as a welcome relief to many families, especially in the midst of the current financial and economic upheaval.  Since the middle of July, the price of gas has fallen from a record high of $4.12 to today’s price of $2.39 per gallon – a decline of nearly 42%.

While this decline is certainly very significant and has gone a long way to ease our pain at the pump, has it been enough to drastically alter your lifestyle and spending habits?

According to a recent poll on, the responses seem pretty evenly split between those who have been affected by lower gas prices, and those that haven’t.

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