BOSTON, (Oct. 24) – Gasoline prices have continued to fall in much of the nation according to price-tracker GasBuddy.com, which supplies the data for wane.com’s Gas Gauge. But while the trend has continued, a long-standing trend has been broken. For the first Monday in the last 119 (a total of 833 days), the national average stands higher than it did a year ago. The national average fell 1.8 cents in the last week to $2.22 per gallon, while diesel prices rose an average of 0.2 cents per gallon to $2.42 per gallon.
Oil prices rose 91 cents per barrel last week, the third weekly increase, but barely maintained the $50-per-barrel level as continued doubts over the likelihood of OPEC and non-OPEC countries cutting oil production in the weeks ahead lingered. A barrel of West Texas Intermediate crude oil started the week last week at $49.94 per barrel, closing Friday at $50.85 per barrel after rising as high as $51.60 on Wednesday.
“For the first week in the last 119 weeks (833 days), the national average price for a gallon of regular gasoline stands higher than it did a year ago. The trend that has delivered consistently lower gas prices is showing signs of fading away as consistent discussion from both OPEC and non-OPEC members appears to be aligned for a likely production cut at the OPEC meeting in late November,” said Patrick DeHaan, senior petroleum analyst for GasBuddy.
“In terms of recent gas prices, it has been a bit of a mixed bag in the U.S., with the exception of Utah, the largest fifteen changes in gas price averages over the last week have all been lower. The Midwest has been the primary beneficiary as both unplanned maintenance and planned maintenance begin to wrap up, which is likely to be soon mirrored across much of the rest of the country, but OPEC’s decision looms as a possible major impact to the market over the next month. If OPEC does follow through and cuts crude oil production, expect gas prices this winter to stay higher than last year. If OPEC doesn’t cut production, gas prices would likely drop in many areas across the country. It’s very difficult to gauge what the outcome may be given the agendas of various oil producing countries, but no matter, don’t expect gas prices this winter to drop as low as last year, and certainly don’t expect next summer’s gas prices to be as low as this year,” DeHaan added.
Oil prices remain at elevated levels and are well supported as OPEC’s main meeting in Vienna draws closer. Continued speculation was that OPEC is preparing to cut oil production, with support from non-OPEC countries, such as Russia, as well. While cutting oil production could act as a floor to oil prices, U.S. frackers are carefully watching the situation and may enter the market again after getting out of the market due to low oil prices the last two years.
Back in the U.S., gas prices have continued to move downward as the bulk refinery maintenance season appears to be behind us. Last week’s Energy Information Administration report showed refinery utilization (or use of capacity) at 85.0%, a half-percent decline, much attributed to challenges in the Pacific Northwest where a major storm disrupted barges that supply refineries, and led to a temporary collapse in utilization, from 84.7% the previous week to 76.1% last week. Refineries in the Rockies also took a hit as maintenance continued, so that region may see higher gas prices as a result, but the East Coast, Midwest, and Gulf Coast all saw refinery utilization rise.
Average gas prices in twenty seven states declined over the last week, while 23 saw prices rise. Leading with the largest change in price versus last week: Ohio (-12.4 cents), Michigan (-12.1 cents), Utah (+5.8 cents), Wisconsin (-5.1 cents) and Illinois (-4.6 cents). These Midwest states benefited by BP’s major Whiting, Indiana refinery returning after an unplanned outage.
Oklahoma took the crown with the nation’s cheapest gas price at $1.97 per gallon, followed by Arkansas ($2.02), New Jersey ($2.03), Ohio ($2.03) and South Carolina ($2.04). Motorists in New Jersey will see gas prices will zoom higher on November 1, as a 23 cent per gallon increase in gasoline tax hits New Jersey stations and they pass along the increase to motorists.
Hawaii continued to showcase the nation’s most expensive gallon of gasoline at $2.89, while California followed at $2.78 and Washington at $2.72. Sixteen of the nation’s twenty most expensive states saw average prices decline over the last week, but motorists in California will see a break in the coming weeks as Southern California switches off stringent summer on October 31. The cheaper winter gasoline will allow gas prices to fall throughout Los Angeles, San Diego, Orange County, and surrounding areas.