Friday, January 30, 2015

Gas Price Freefall Stalls

The streak of consecutive daily declines in U.S. gasoline prices ended earlier this week as prices rose in several states, but the party may not be over for motorists who have gotten used to spending less and less at the pump. Related: What Was the Best-Selling Car in 2014? The national average for regular unleaded stood at $2.04 Thursday, according to the AAA Daily Fuel Gauge Report. That was unchanged from a week ago, but up a penny from Monday. Pump prices jumped by double digits in some Great Lakes states during the past week, which AAA said was due to refinery issues in that region. Widespread price declines at the pump could resume soon because U.S. crude oil was trading at less than $45 a barrel on news that oil stockpiles have hit the highest level since records began in 1982. U.S. oil prices closed Wednesday at $44.45 per barrel, the lowest since March 2009. Oil accounts for more than half the cost of a gallon of gas. Even with the current glut of oil, gas prices are expected to rise starting in the spring when refineries shut down for routine maintenance, temporarily crimping the supply in the areas they serve, and then switch over to summer gas blends that cost more to produce. In addition, motorists typically drive more during the warm months, increasing demand. Forecasters, though, doubt that pump prices will come close to the 2014 peak of $3.70. "While gas prices are likely to increase this spring due to seasonal demand and maintenance, barring any major increase in the global price of crude, AAA expects the national average to remain below $3 per gallon during 2015," the organization said in a release. The U.S. Energy Information Agency expects regular gas to average $2.33 per gallon this year, compared to $3.36 in 2014. The EIA forecasts that pump prices will rise to an average of $2.72 in 2016. isn't as optimistic, predicting that regular will average $2.64 per gallon this year. Pump prices continued to fall the past week in several eastern and western states, but motorists in some central states were paying significantly more. Average prices for regular unleaded rose 11 cents in Indiana to $2.04, 16 cents in Ohio to $2.09 and 19 cents in Michigan to $2.05. The lowest average prices for regular were in Texas, $1.85; Missouri, $1.84; and Oklahoma, $1.83. The average in Missouri rose 8 cents during the past week and by smaller amounts in Texas and Oklahoma. Hawaii, at $3.18 for regular, and Alaska, at $2.70, were the only states averaging more than $2.50. At the same time gas prices stalled, diesel prices fell by 5 cents the past week to a $2.82 national average, $1.06 less than a year ago. Regular gas was averaging a whopping $1.24 cents less than on Jan. 29, 2014, a 38 percent drop, and premium was $1.19 less at $2.44.

from KickingTires


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