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:

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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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Despite Recent Climb, Gasoline Prices Still 40% Below Peak

December 16, 2009 by Leave a Comment

The national average price of a gallon of regular unleaded gasoline has fallen three cents over the past week to $2.60, and now stands at a nearly two month low.

This recent decline in the price of gasoline is pretty much in-step with the decline of the price of oil, which has been brought about by larger than expected reserve reports as well as a stronger dollar.

Despite the recent decline in price, the national average gasoline price is still nearly 60% higher than it was at this time last year.  Although, to put things in a little bit of perspective, the price of gasoline is still nearly 40% below the record high of $4.12 set back in July 2007.

Currently only two states – Alaska ($3.80) and Hawaii ($3.34) – are reporting average prices above $3 per gallon. There are now 18 states reporting an average price below $2.50 per gallon, with Oklahoma coming in with the lowest state-wide average price at $2.38 per gallon.

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National Average Gas Price Continues to Fall – Now at $2.40 per Gallon

November 3, 2008 by Leave a Comment

The national average price for a gallon of regular unleaded gasoline now stands at $2.40 per gallon – a price not seen since early March 2007.

Gasoline prices are now down nearly 42% from the record highs set back in mid-July of this year.  Over the past month, the price of gas has fallen by nearly 33%; even over the past week, it’s fallen over nine percent.

In fact, prices have fallen so far, that today’s average price is 13% below what it was exactly one year ago.

There are only two states reporting an average gas price above $3 per gallon: Hawaii at $3.61 and Alaska at $3.32.  Currently, 34 states plus Washington, D.C. are reporting an average price below $2.50 per gallon, with Oklahoma reporting the lowest average price at $2.01 per gallon.

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Expect Gas Prices to go Down by the New Year? Don’t Count on it.

August 30, 2008 by 5 Comments

Despite the fact gas prices have declined for nearly a month and a half straight – falling from a record high of $4.12 per gallon on July 16, to today’s average price of $3.69 per gallon – according to a recent poll on Daily Fuel Economy Tip, roughly two-thirds of drivers believe we won’t see much more relief by the end of the year, if we see any at all.

The poll very simply asked, “What will the national average gas price be on January 1, 2009?” Here’s how over a hundred readers responded:

  • 66% believe gas prices will be in excess of $3.50
  • 17% believe gas prices will be between $3.26 and $3.50
  • 11% believe gas prices will be less than $3
  • 6% believe gas prices will be between $3.00 and $3.25

To put things in perspective, between 11 and 17 percent of respondents believe we will be paying less for gas on January 1, 2009 than we were on January 1, 2008, when the national average stood at $3.05 per gallon.

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Gas Prices Fall Back Below $4

July 25, 2008 by Leave a Comment

For the first time since June 6, the national average price for a gallon of regular unleaded gasoline has fallen below the $4 mark.

According to GasBuddy.com, the national average price for gasoline has slipped to $3.99 per gallon. While this is certainly good news for many drivers – the price of gas has been on a slow and steady decline since hitting its record high of $4.12 on July 14 – there probably isn’t much solace to be taken. After all, gas prices are still up nearly 35% since last year.

Currently, the state with the lowest average price is Missouri at $3.73 per gallon, while Alaska is reporting the highest prices at a whopping $4.81 per gallon. There are 16 states reporting an average gas price above $4 per gallon.

The recent drop in gas prices – and the price of oil for that matter – can be mainly attributed to a single factor: as the price of gasoline has increased, our demand has started to decrease. After years of wondering what the American consumer’s breaking point is regarding increased fuel costs, I think it’s safe to say we’ve found it.

Since oil hit its record high of $147.00 per barrel on July 11, prices have fallen roughly 15%, due in large part to demand destruction. Over the past several weeks, government reports have shown that Americans are driving less) (i.e. using less fuel) and the economy is continuing to weaken – which will likely reduce both current and future demand as well.

Considering most of the oil imported to the U.S. goes towards the production of transportation fuels, it’s no wonder the decrease in demand for transportation fuels has caused such a dramatic turn around in the price of crude oil. People have been driving less, walking or riding a bike more and have started switching out their gas guzzlers for vehicles with better fuel economy.

While this temporary relief is certainly good news for many, I don’t expect the good times to get much better, or last much longer.

Ultimately, it seems like we’re going to be stuck in this price range for both gasoline and oil. As oil and gasoline prices rise, demand falls which in turn brings down the price. As oil and gasoline prices decrease, demand starts to climb again, which in turn causes the price to go back up.

So, enjoy your sub-$4 gas while it lasts.

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