Expected to Drop Further by Year’s End

The Week

During the month of November, the national gas price average fell to $3.18 per gallon on Nov. 12, which was the lowest average since Feb. 22, 2011, before climbing as much as ten cents to reach $3.28 per gallon on Dec. 2.  This streak of rising prices comes on the heels of a stretch where the national average ticked lower on 65 of 72 days from Sept. 1 until Nov. 12 and fell 41 cents during that span.  This week the national gas price average dropped to $3.26 cents per gallon Friday, which is two cents less expensive than one week ago, three cents more expensive than one month ago and 12 cents cheaper than the same date last year.  The recent increase in retail prices has been fueled primarily by increases in Southeastern and Mid-Atlantic states due to planned and unplanned maintenance at a number of Gulf Coast refineries, which resulted in a ripple effect across the eastern half of the country, and seasonally stronger demand for gasoline.

Crude oil prices continued an uptick this week, reaching a five-week high Thursday ($97.21) and just shy of the $98 per barrel mark.  The commodity has been supported by a drop in U.S. crude stockpiles after a 10-week increase.  Gains have been curbed by speculation that positive U.S. economic data could prompt the U.S. Federal Reserve to halt its stimulus bond-buying program, which could reduce support for riskier assets such as oil and other commodities.  Crude prices were also supported by news that TransCanada expects service on the southern leg of Keystone XL pipeline to begin in early January.  Crude oil settled at $97.77 per barrel.

In its weekly report, the Energy Information Administration (EIA) data showed that crude oil stocks saw a large 5.6 million barrel drop to 385.8 million barrels, far greater than estimates had projected the drop to be.  U.S. gasoline stocks saw a build of 1.8 million barrels last week to 212.4 million barrels.  Demand for gasoline was relatively flat compared to the previous week as demand slipped by 36,000 barrels per day (bpd), but is still unseasonably strong at 8.873 million bpd.

The Weekend

“November was a frustrating month for many drivers as hopes for $3 per gallon gasoline slipped away due to unexpected refinery problems and tightening supplies,” said Tracy Noble, spokesperson for AAA Mid-Atlantic.  “Despite the recent uptick, gas prices fortunately remain noticeably less expensive than in recent years.  AAA expects prices will reverse recent trends as supplies build and drop another 10-15 cents per gallon by the end of the year.”

The Week Ahead

Gas prices often reach a low for the year in the middle of December.  The national average reached a low of $3.22 per gallon on Dec. 20, 2012, and reached a low of $3.21 per gallon on Dec. 21, 2011.  The national average declined three out of the previous five years in December for an average of six cents per gallon.  The annual average for 2013 likely will be the cheapest since 2010 and is currently at $3.51 per gallon. Last year’s annual average of $3.60 per gallon was the most expensive on record.

Regular Unleaded Gasoline

 

12/06/13

Week Ago

Year Ago

National

$3.26

$3.28

$3.38

New Jersey

$3.27

$3.27

$3.45

Trenton

$3.31

$3.30

$3.50

Cape May County

$3.25

$3.25

$3.45

Burlington County

$3.25

$3.25

$3.35

Middlesex, Somerset, Hunterdon

$3.27

$3.26

$3.45

Monmouth, Ocean Counties

$3.28

$3.27

$3.46

Crude Oil

$97.77 per barrel

$92.72 per barrel

$86.26per 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.