The Week

As an estimated 43.4 million Americans hit the roads this week for the Thanksgiving holiday, motorists filled up their tanks paying prices that were higher than the multi-year low of $3.18 per gallon on November 12 but approximately four percent lower than last year heading into the holiday.

With most travelers returning home today through Sunday, many will be paying higher gas prices than when they filled up their vehicle before their trip.  The nationwide average price for a gallon of gas today is $3.28 a gallon, which is four cents higher compared to a week ago, unchanged from last month, but 13 cents lower than the price at this time a year ago. 

The recent increase in prices is due to planned and unplanned maintenance at a number of Gulf Coast refineries, which supplies the Mid-Atlantic area, and seasonally stronger demand for gasoline. One factor not contributing to rising pump prices has been the price of crude oil.  On July 3 the price of West Texas Intermediate (WTI) crude oil rose above $100 per barrel where it remained for 15 straight weeks. This streak came to an end on October 21 and WTI has now settled below the $100 per barrel mark for six straight weeks. 

 

Contributing to the downward pressure the past week was last weekend’s announcement of a six-month agreement to relax some sanctions on Iran.  While the deal is expected to have a limited impact on global crude oil supplies – the White House has indicated that Iranian oil exports will remain below one million barrels per day during the next six months – the deal does help to ease geopolitical tensions in the region and further reduces some of the “fear premium” that has been baked into oil markets and contributed to higher prices. Iranian oil exports this October averaged an estimated 700,000 barrels per day, which is down significantly from the 2.2 million barrel per day average in 2011.

Even with oil prices widely expected to move lower on this agreement, the impact on pump prices will not be immediate. Changes in oil prices take a week or so to make their way through the supply chain and fully impact retail prices for consumers.

Crude oil continued trending downward this week closing at $92.30 on the Wednesday before the holiday.  However, as of mid-morning Friday, the commodity was trading slightly higher at just over $93 per barrel to close at $92.78.

The Weekend

“As travelers return home from their Thanksgiving holiday getaway, many are paying gas prices that are higher than what they paid before leaving on their road trip,” said Tracy Noble, spokesperson for AAA Mid-Atlantic.  “While gas prices will most likely remain elevated in the short term, prices are expected to switch gear and decline for the remainder of the year barring any unforeseen circumstances that could disrupt the global oil supply.”

The Week Ahead

AAA expects that the national average will stay flat or even rise a few cents higher in the coming days.  However, as gasoline refined from likely cheaper crude oil makes its way to consumers and refinery issues are resolved, AAA continues to believe that the national average will fall to approximately $3.10 per gallon before the end of the year and an increasing number of motorists will enjoy local prices below $3.00 as the holidays draw near.

 

Regular Unleaded Gasoline

 

11/29/13

Week Ago

Year Ago

National

$3.28

$3.24

$3.41

New Jersey

$3.27

$3.19

$3.50

Trenton

$3.30

$3.22

$3.55

Cape May County

$3.25

$3.17

$3.50

Burlington County

$3.25

$3.17

$3.40

Middlesex, Somerset, Hunterdon

$3.26

$3.18

$3.50

Monmouth, Ocean Counties

$3.27

$3.19

$3.50

Crude Oil

$92.78 per barrel

$94.84 per barrel

$87.38per barrel

AAA is the most comprehensive resource for gas prices and its reports reflect actual prices from credit card transactions at more than 100,000 gas stations in the U.S.

AAA has a variety of resources to help motorists save on fuel:

AAA Mid-Atlantic, serves nearly four million members in parts of New Jersey, Pennsylvania and Virginia, and throughout Delaware, Maryland and the District of Columbia, and is on the Web at AAA.com.