BOSTON (Oct. 17) – Gasoline prices are on their way back down—at least for now—according to price-tracker GasBuddy.com. The national average fell 2.4 cents in the last week to $2.23 per gallon, while diesel prices rose an average of 1.9 cents to $2.42 per gallon.
Oil prices fell $1 per barrel last week, but maintained the $50-per-barrel level due to concern over the likelihood of OPEC and non-OPEC countries cutting oil production in the weeks ahead. A barrel of West Texas Intermediate crude oil did not close once under $50 last week, solidifying a new floor at the higher price for the time being.
While the market clearly expects some sort of broad cooperation in cutting global oil production, led by OPEC members, there’s still a possibility that no action follows up the talk of such a cut. Fresh signs emerged last week that an oil production cut may not have the strength previously expected, as comments from Russia questioned their desire to join in.
Back in the U.S., gas prices have finally begun to move downward as refinery maintenance season begins to wrap up, leading to more gasoline production at a time of year that demand is waning. Average gas prices declined in nearly two-thirds of states over the last week, led by the Midwest, where unplanned maintenance at BP’s Whiting, Indiana refinery wrapped up. Indiana saw their average price decline nearly 15 cents per gallon to $2.14 per gallon, while Ohio fell 13 cents to $2.15, Michigan fell 11 cents to $2.22 and Illinois fell 9 cents to $2.26.
Leading states seeing increases was Utah, who saw a rise of 7 cents to $2.30 per gallon on a large drop in refinery utilization in the Rockies, where refiners utilized 8.8% less capacity in the last week, according to the EIA. Previously, refiners in the region were running at 94.4% capacity, but more refineries likely joined in performing maintenance last week.
Oklahoma took the crown with the nation’s cheapest gas price at $2.00 per gallon, followed by Texas ($2.01), New Jersey ($2.01), Arkansas ($2.04) and Louisiana ($2.05). Motorists in New Jersey should enjoy the cheap gasoline prices while they last, as Governor Chris Christie signed legislation last week that will boost gasoline prices in the Garden State by 23 cents per gallon effective November 1. Gas prices will likely zoom higher in New Jersey as stations pass along the increase to motorists.
Hawaii continued to offer the nation’s most expensive gallon of gasoline at $2.88, while California followed at $2.77 and Washington at $2.70. Nine of the nation’s ten most expensive states saw average prices decline over the last week with Alaska rising a penny per gallon. Motorists in California could see a break in the coming weeks as Southern California will soon switch away from the stringent summer gasoline to less stringent and cheaper-to-produce winter gasoline on October 31.
Moving forward this week, all eyes will be on the EIA on Wednesday, looking at refinery utilization that is expected to rise as the bulk of refinery maintenance season has likely passed. In addition, look for any hints or comments from OPEC oil ministers—any failure to cut oil production at its November meeting will likely cause oil prices to plummet, while, a firm agreement to tighten production could gas gasoline and oil prices to rise.
For live fuel price averages and other data, visit http://FuelInsights.GasBuddy.com.