Gas Prices Still Heading Downward

July 12, 2010 by Leave a Comment

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:

oil prices, price of oil, gas prices, gasoline prices, price of gas, price of gasoline

As you can see, this chart (courtesy of GasBuddy.com) 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.

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Oil Dips Below $70 Then Rallies

May 18, 2010 by Leave a Comment

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.

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Not so Fast for $3 Gasoline?

May 13, 2010 by Leave a Comment

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.

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The Inevitability of $3 Gas

April 29, 2010 by 3 Comments

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.

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Oil Above $80 While Price of Gasoline Remains Flat

February 22, 2010 by 6 Comments

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.

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How Much Does Your Commute Suck?

February 17, 2010 by Leave a Comment

One of the most painful things of any person’s day is the commute to and from work.

In the morning, you’re half asleep, stuck in traffic surrounded by a bunch of idiot drivers, and heading into a job you’d rather not be at. In the afternoon, you’re drained from sitting through boring meetings, being stuck in traffic surrounded by a bunch of a-holes, and probably heading to a hectic situation at home.

Driving your car used to be a release. Now it’s just an added stress.

Fun!

Thankfully, according to a recent poll, it appears that most of us don’t have to spend a “significant” amount of time blowing a gasket while bonding with our fellow commuters.

When asked “How long (on average) does your roundtrip commute take?” nearly 250 Daily Fuel Economy Tip readers responded with the following answers:

  • 44% – Less than 30 minutes
  • 26% – Between 30 minutes and 1 hour
  • 19% – Between 1 and 2 hours
  • 11% – Greater than 2 hours

A roundtrip commute of less than 30 minutes really isn’t all that bad. I know I’d enjoy that.

And with a one-way commute of about 15 minutes, it sort of begs the question: how many of these people walk or take mass-transit?  Nothing like letting someone else do all of the driving.

What’s your commute like?  Leave your comments below.

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Toyota’s Recall is Exactly What Detroit Needs

January 28, 2010 by 5 Comments

For years, it has been a common perception – or misperception as the case may be – that Japanese cars, particularly Toyota and Honda, were of better quality than their American counterparts, Ford, General Motors, and Chrysler.

Don’t get me wrong, American cars did plenty to substantiate those perceptions, especially considering they were behind the curve when it came to moving from massive trucks and SUVs to more fuel efficient sedans, compact cars, and hybrids.

However, with the news the Toyota has recalled 2.3 million vehicles – including some of its best selling models –due to a problem that could make the vehicle’s gas pedal stick, and its announcement that the company will halt sales of all affected models for the time being, is the tide finally starting to turn in Detroit’s favor?

Over the past several years, American car makers – Ford in particular – have received praise for drastic improvements in reliability and quality. In fact, the Ford Fusion was recently named Motor Trend’s Car of the Year for 2010, which is a pretty big deal.

I think when you couple Detroit’s momentum with Toyota’s huge setback, I think we’re on the verge of viewing American cars as being at least as good as, if not better than, their foreign counter parts.

What do you think? Leave your comments below!

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The Days of $2 Gasoline Coming to an End

January 8, 2010 by 1 Comment

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 GasBuddy.com, 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!

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3 Reasons Gasoline is Going to $5 a Gallon

January 3, 2010 by 16 Comments

One of the benefits of The Great Recession has been a respite from high gas prices.  Unfortunately, I think this break will be over very soon and that record high gasoline prices are just around the corner.

Back in July of 2008, the average price for a gallon of regular unleaded gasoline hit a record high of $4.12 per gallon.  Within six months, the bottom had fallen out of the economy and the average price of gasoline had dropped to $1.60 per gallon.

Gas PricesThanks to drastic coordinated measures by the world’s central banks and governments, a total economic collapse was avoided, an economic rebound started to take hold, and gasoline prices climbed back to the $2.60 range.

While avoiding a total “end of the world as we know it” scenario was certainly something that had to be done, the money printing measures may have set us up to face much higher gasoline prices in the near-term future.

Below are the three main reasons why I believe not only will we break the record high prices set back in July 2008, but we can expect to start paying $5 or more for gasoline.

[Read more…]

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Oil Above $78, Gasoline $1 Higher Than 12 Months Ago

December 28, 2009 by 2 Comments

Due to falling reserves, a slightly weaker dollar, and belief in the economic recovery, the price of oil has climbed to over $78 per barrel, which is its highest price since December 1, when the price stood at just below $78.50.

In turn, there has been slight pressure on the price of gasoline, which is up two cents for the week and now stands at $2.61 per gallon. There is usually a little bit of a lag between when swings in the price of oil hit the price of gasoline, so there will likely be a slight jump in the price of gasoline over the coming weeks.

Over the past month, the price of gasoline has moved in a very narrow range between $2.58 and $2.64 per gallon.

While this is certainly welcome news to cash-strapped consumer, the jump in the price of gasoline over the past year certainly is not. The price of gasoline is now $1 – or 62% – higher than it was at this time last year.

Currently, only Alaska ($3.77) and Hawaii ($3.68) are reporting state-wide average gasoline prices above $3 per gallon, while 14 states are reporting an average price below $2.50 per gallon. Missouri has the lowest average gasoline price in the United States at $2.41 per gallon.

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