Prices at the Pump, Like Most of the Mid-Atlantic Region, Remain Relatively Frozen

The Week

The national average price of gasoline has fallen 13 of 16 days (through Friday) since Thanksgiving. This follows a streak of 15 consecutive daily increases leading up to the holiday.  Retail gas prices nationwide moved lower following the end of the summer driving season in September and approaching Thanksgiving, as plentiful supplies, flat demand and falling crude oil prices combined for welcome and often dramatic relief at the pump for motorists.  This week the national gas price average dropped a penny $3.25 cents per gallon Friday, six cents more expensive than one month ago and remains five cents less than the same date last year.  While the 130-day streak (through Friday) of year-over-year discounts continues, the yearly savings is at its narrowest mark since early August.

Underlying the recent volatility in gas prices has been the price of West Texas Intermediate (WTI) crude oil.  After 15 straight weeks above $100 per barrel, WTI has remained below this threshold for eight consecutive weeks, even after gradually settling higher the past two weeks on positive economic news, including a rosier than expected job report.  A stronger economy – both domestically and overseas – puts upward pressure on crude oil prices as more robust economies are expected to use more oil.  After closing last week with the highest settlement since October ($92.72 per barrel), the price of crude oil fell to $96.51 per barrel this week at Friday’s close.

In its weekly report, the Energy Information Administration (EIA) data showed crude oil production continued to climb in the U.S. with total output climbing 64,000 barrels per day (bpd) to 8.075 million bpd, a 25-year high going back to October of 1988.  As a result, crude oil imports saw a sharp drop of nearly 1 million barrels to 6.862 million bpd, a low not seen since early 1997.  The sharp decline in imports, along with an uptick in crude and other feedstock runs have led to the 10.6-million-bbl draw on crude oil inventories, pushing totals down to 375.2 million barrels.  Gasoline inventories climbed by more than 6.7-million barrels to 219.1 million barrels and could approach 230-million or 240-million barrels this winter.  The weak demand figures that were expected to show up perhaps a bit earlier this fall have started to grab hold with gasoline demand falling by 525,000 bpd to 8.348 million bpd. Those types of demand figures are common in the winter, with last week's demand figures the lowest since January. 

The Weekend

“Like most of the Mid-Atlantic region, gas prices have frozen somewhat over the past week,” said Tracy Noble, spokesperson for AAA Mid-Atlantic. “Lingering effects from maintenance at Gulf Coast refineries have resulted in pump price stabilization in many areas throughout the region.  However, a stronger economy, both domestically and overseas, has put upward pressure on crude oil prices.  These factors have created a mixed bag at the pump, a trend that may very well continue through the end of the year.”

The Week Ahead

In its Short Term Energy Outlook (STEO), the EIA is projecting gas prices will average $3.50 per gallon this year.  The annual average regular gasoline retail price, which was $3.63 per gallon in 2012, is expected to average $3.43 per gallon in 2014.  The Energy Department also projects crude oil prices will average $95 per barrel in 2014.

 

Regular Unleaded Gasoline

 

12/13/13

Week Ago

Year Ago

National

$3.25

$3.26

$3.30

New Jersey

$3.29

$3.27

$3.36

Trenton

$3.33

$3.31

$3.43

Cape May County

$3.29

$3.25

$3.37

Burlington County

$3.28

$3.25

$3.27

Middlesex, Somerset, Hunterdon

$3.29

$3.27

$3.36

Monmouth, Ocean Counties

$3.30

$3.28

$3.38

Crude Oil

$96.51 per barrel

$92.72 per barrel

$85.89 per 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.