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Higher Gas Prices Possible from Syrian Unrest

August 27, 2013 by · Comments Off on Higher Gas Prices Possible from Syrian Unrest 

A map of Syrian oil fields. Oil-producing areas are shown by circles. Dotted lines are oil or natural gas lines. Hashed lines are railroads.Map courtesy of Wikipedia.

Gasoline futures prices were ready to close at their highest price in more than a month on Tuesday (Aug. 27), buoyed by strength in oil prices on the back of risks tied to Syria. And with the U.S. Labor Day holiday, the rally in the futures market may be a threat to prices at the pump, according to AAA.

MarketWatch reported that on Tuesday afternoon, September gasoline added nearly 9 cents, or 2.9%, to $3.04 a gallon on the New York Mercantile Exchange. That would be the highest settlement for a most-active contract since July 23, according to FactSet data.

The oil market is weighing the increased possibility of U.S. strikes in Syria and “motorists in the U.S. may pay higher gas prices in the days ahead if this sentiment continues,” said Michael Green, a spokesman for AAA said on Tuesday.

“The potential risk could break the recent trend of very stable prices at the pump,” he said. “Higher futures prices do not always translate to higher pump prices, but it should be a concern for motorists with Labor Day approaching.”

The average national price for a gallon of regular gasoline stood at $3.54 on Tuesday. Prices are already on track to be the fourth most expensive on record for the Labor Day holiday on Monday, according to AAA. The most expensive Labor Day average was $3.83 a gallon in 2012.

National average gasoline prices have been “unusually” stable, holding at $3.54 for 13 of the previous 15 days, Green said. They have declined 30 out of the previous 39 days for a total of 13 cents a gallon, “which is a very slow rate of decline,” he said.

A pumpjack in Syria’s Rumeilan oil fields

“Motorists would be paying even less for gasoline today if not for the very expensive price of crude oil,” said Green. “Domestic West Texas Intermediate crude has closed above $100 per barrel every day since July 3, which is the same day the military took control of Egypt.”

Good News as Gas Prices Retreat for July 4th!

July 3, 2013 by · Comments Off on Good News as Gas Prices Retreat for July 4th! 

Prices come down for July Fourth motorists.

If cheap gas is considered as patriotic as draping Old Glory in the back window of your pickup truck, the news from the government’s oil price watchers couldn’t come at a better time.

USA Today reported that the price of regular-grade gasoline has fallen below $3.50 a gallon on average nationally just in time for the Fourth of July weekend in the weekly survey by the Energy Information Administration (EIA) reports.

And it wasn’t just a tiny price drop. A gallon of regular fell eight cents during the week from $3.577 to $3.496. That’s unusual, given not only that the four-day holiday weekend is coming up, but also because the nation is entering the heart of the summer vacation driving season.

Among regions, the cheapest gas can still be found, as usual, on the refinery-rich Gulf Coast. There, it averaged $3.312 a gallon, down from $3.377 a gallon.

And the priciest? In California, the country’s driving Mecca, gas still tops an average of $4 a gallon — but just barely. It’s $4.002 in the survey. On the West Coast in general, including California, gas averages $3.892.

Why Are Fuel Prices Spiking in a Spotty Way?

June 11, 2013 by · Comments Off on Why Are Fuel Prices Spiking in a Spotty Way? 

Pain at the pump not everywhere in the U.S.

With more Americans hitting the road as the summer driving season kicks off, they’re paying a lot more attention to the price of gasoline at the pump.

And with prices spiking in several parts of the country, a lot of drivers are wondering why they are suddenly shelling out more to fill up, CNBC News reported.

As usual, many forces are at work — from refinery outages to spot shortages. And any time prices spike, many drivers suspect that someone may be rigging the market. This time, they may be right.

Gasoline prices are all over the place. Why are prices so different from one place to another?

A lot has to do with the available refining capacity in a particular region, along with the transportation costs in getting fuel to the drivers who need it.

Then add in state gasoline taxes, which range from Alaska, where you pay only 8 cents a gallon, to New York, which tacks on 50.6 cents to the price of every gallon.

Click here to read the entire story.

Report: Gas Prices Rise for 33 Straight Days

February 19, 2013 by · Comments Off on Report: Gas Prices Rise for 33 Straight Days 

U.S. consumers facing the highest gasoline pump prices ever for February may see further increases as global crude oil futures climb and breakdowns and seasonal maintenance at refineries reduce fuel supplies.

Bloomberg reported that prices at the pump are up 14% this year and have risen 33 straight days, according to AAA data. Brent crude in London, the pricing basis for gasoline imports and for oil used by coastal refiners, advanced to a nine-month high Feb. 8.

Unit breakdowns and seasonal repairs reduced refinery processing by 8.3% since mid-December, cutting fuel production, Energy Information Administration data show. Regular gasoline has jumped 45.6 cents this year, the fastest increase in AAA data back to 2005. Prices may peak earlier than they did last year, according to Avery Ash, a spokesman for AAA, the nation’s largest motoring organization.

“What’s driving the price up is the fear we might not have enough supply,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant. “It’s a national concern.”

The average nationwide pump price gained 1.8 cents to $3.748 a gallon, 19.2 cents higher than a year ago, AAA said on its website today. In 2008, when prices reached an all-time high of $4.114, regular gasoline cost $3.032 on Feb. 18.

Why Gasoline Prices are Rising in February

February 12, 2013 by · 1 Comment 

It starts here.

A combination of high crude prices, refinery shutdowns and early speculation has sent gas prices soaring to seasonal highs earlier than usual this year, with no signs of prices at the pump falling until spring, according to recent estimates.

The Christian Science Monitor reported that gas prices have climbed every day for the past 25 days, reaching a national average of $3.59 per gallon on Monday (Feb. 11), the most expensive national average ever for a Feb. 11, according to AAA.

During just the past two weeks, average prices have climbed almost 25 cents, the biggest jump in gas prices in almost a year.

This is a very early rise,” says Tom Kloza, chief oil analyst at the Oil Price Information Service (OPIS). “January has tended to be a quiet month through the years, but the rally really began in earnest around Jan. 15.”

Gas prices tend to increase in late February as refineries shut down for maintenance ahead of the busy summer driving season.

There are three reasons for the spike, say analysts.

Higher crude prices. This rise, especially overseas, has pushed up prices at the pump, says Michael Green, a spokesman at AAA.

“This year oil prices are rising with expectations that the global economy will continue to improve,” said Green. “Gas prices are intimately connected to oil prices, [which are] very much connected to what is going on in other parts of the world. Events overseas have a big effect on prices American motorists pay at the pump.”

In fact, crude oil prices have risen 10% during the past two months, and the price of crude accounts for almost 70% of the cost of a gallon of gas, according to the US Energy Information Administration.

Seasonal changes. Refineries usually shut down for maintenance in late winter, temporarily reducing gas supplies. As per federal requirements, refineries also begin transitioning at this time of year to summer blend gasoline – a more environmentally-friendly, and expensive, blend to produce. This reduces current winter blend gas supplies.

Financial market speculation. In addition, the rally has been driven by earlier-than-usual speculation that demand for oil will rise, further inflating prices, said Kloza. In a recent Commodity Futures Trading Commission report, Kloza said he calculated that there is about $45 billion more bet on higher petroleum futures than on lower ones. In other words, more traders expect oil prices to rise in the future than to fall, an expectation that causes oil producers to horde oil in the hopes they can sell it at higher prices later on. That dries up current supplies and translates to higher prices at the pump, which Kloza says we’re already seeing.

 

‘Perfect Storm’ Propels Gas to Record High

October 8, 2012 by · Comments Off on ‘Perfect Storm’ Propels Gas to Record High 

Gas prices spike in California.

The price of gasoline equaled the all-time average high in California of $4.61 a gallon Saturday (Oct. 6), fueled by a reduced supply and a volatile market.

Prices throughout the state were expected to increase for several more days before leveling off, after a temporary reduction in supply triggered a price spike that saw fuming motorists paying $5 or more per gallon in some locations and station owners shutting down pumps in others, The Associated Press reported.

AAA’s Daily Fuel Gauge report released Saturday said the average price for a gallon of regular unleaded across California rose 12 cents from its Friday mark of about $4.49.

Saturday’s price, the highest in the nation, equaled the record average high for California set in June 2008 of $4.61.

The Golden State leapfrogged Hawaii as the state with the most expensive fuel. The average price for a gallon of regular unleaded across California was 47 cents more than a week ago, according to the AAA report.

The national average Saturday was about $3.81 a gallon, the highest ever for this time of year. However, gas prices in many other states have started decreasing, which is typical for October.

The dramatic surge came because of a power outage Oct. 1 at a Southern California refinery reduced supply in an already fragile and volatile market, analysts said, but the refinery came back online Friday and prices were expected to stabilize this week.

Patrick DeHaan, senior petroleum analyst at GasBuddy.com, predicted the average price could peak as high as $4.85.

“There is some relief in sight but probably not for a couple of days. Early next (this) week is when we may see some more significant declines … but at retail prices, prices may climb for the next two to three days before they start to come down,” he said.

While prices were higher everywhere in California, there were variances Saturday. Chico had the lowest average price at $4.46, according to AAA, while San Luis Obispo was highest at $4.71. Prices averaged $4.67 in San Diego, $4.66 in the Los Angeles area, $4.55 in Fresno and $4.49 in Sacramento.

A web of refinery and transmission problems is to blame, analysts said. The situation is compounded by a pollution law that requires a special blend of cleaner-burning gasoline from April to October, said Denton Cinquegrana, executive editor of the Oil Price Information Service, which helps AAA compile its price survey.

“We use the phrase ‘the perfect storm,’ and you know what, this current one makes those other perfect storms look like a drizzle. I don’t want to scare anyone, but this is a big problem,” Cinquegrana said. “Run-outs are happening left and right.”

Among the recent disruptions, an Aug. 6 fire at a Chevron Corp. refinery in Richmond left one of the region’s largest refineries producing at a reduced capacity, and a Chevron pipeline that moves crude oil to Northern California also was shut down.

There was some good news.

Exxon Mobil Corp. said a refinery in Torrance returned to normal operations Friday after a power failure Monday disrupted production for most of the week. State officials said with the refinery coming back online, prices should start falling.

“The wholesale market appears to have peaked and is heading down,” said Alison apRoberts, a spokeswoman for the California Energy Commission. “Because it takes a little while for the price reductions to funnel through the system, consumers at the pumps should start to see some declines over the next week.”

Gasoline inventories in California, however, are still at their lowest point in more than 10 years, a situation made worse by the mandate for the special summer gasoline blend. Few refineries outside the state can make it, meaning there are few outside sources to draw from for help, Cinquegrana said.

The California Air Resources Board was reviewing a request from the California Independent Oil Marketers Association for a waiver that would allow gas stations to begin selling winter-blend gasoline before Halloween.

David Clegern, a spokesman for the air board, said the California Energy Commission would have to review gas inventories to confirm there is a shortage and assess what effect the switch would have on air quality.

ApRoberts said Friday that the commission has determined that the state has plenty of gasoline to meet consumer demand.

Gil Duran, a spokesman for Gov. Jerry Brown, said in an email that his office is “monitoring the situation closely.”

Some stations ran out of gas and shut down rather than take the risk of buying gas at soaring prices only to be stuck with a glut of overpriced fuel if prices dropped or if customers refused to absorb the extra cost that would be passed along to them.

The price of diesel fuel has also increased, adding significant costs for truckers who typically put hundreds of dollars’ worth of gas in their tanks. The average price for diesel statewide was $4.50 a gallon Saturday — 37 cents more than a year ago, according to AAA.

At a truck stop and gas station off state Route 99, on the outskirts of Fresno, independent trucker Joel Vargas said if diesel hits $5 per gallon, he will probably stop driving because he would be losing money.

“With that kind of price, I won’t be able to support myself and my family,” he said.

 

Finally, Gasoline Prices Start Heading Lower

September 26, 2012 by · Comments Off on Finally, Gasoline Prices Start Heading Lower 

In June, amid plummeting gas prices, the prospect of a $3-per-gallon national average seemed like it could become a reality by Halloween.

Time reported that after reaching the most expensive ever gas prices for September — which came on the heels of the highest-ever end-of-summer gas prices — that forecast seems highly unlikely to become reality. But at long last, drivers are finally seeing some relief at the pump.

The latest Energy Information Administration report indicates that the national average for a gallon of regular stood at $3.826 as of September 24. That’s about 5 cents cheaper than the week before.

Gas prices were expected to start declining in August, but Hurricane Isaac, refinery problems, and other factors boosted prices higher. The result: this week is the first time gas prices have declined since way back in early July.

Drivers in some states are getting a bigger break than others. In Michigan, for instance, the the average gallon was 10 cents cheaper in one week’s time, dropping from $4.05 to $3.95. According to AAA’s Fuel Gauge Report, average prices in seven states still remain over the $4 mark (Alaska, California, Connecticut, Hawaii, Illinois, New York, Washington).

It’s also noteworthy that the national average is roughly 30 cents per gallon more than a year ago at this time.

 

Oh, Oh! Gas Prices Moving Back Up

July 10, 2012 by · Comments Off on Oh, Oh! Gas Prices Moving Back Up 

World events send gas prices upward.

Changes in political and economic conditions on the other side of the world are being felt here as the national average price for regular retail gasoline increased last week for the first time in three months.

“Although oil prices retreated at the end of last week, it’s likely motorists have seen the last of the summer price reductions at the pump,” said Jessica Brady, AAA spokeswoman, The Auto Club Group.

According to a report in the Gainesville (Fla.) Sun, the national average price of regular unleaded gasoline is $3.38, 5 cents more than last week.

The price of gas peaked the week of April 6, when the weekly average was $3.92, AAA reported. Prices then entered a downward trend until last week when motorists saw prices jump overnight. Bullish news hit the market at the start of the month and caused oil prices to spike, which has led to the rise at the pump.

The two main factors that pushed oil prices higher last week, AAA reported, were imposed European sanctions against Iran and an agreed upon plan by European leaders to save the euro and resolve the ongoing debt crisis.

The European news, among other things, pushed oil prices to $88 a barrel last week, however the upward pressure soon dissipated after more pessimistic economic news was released. A barrel of oil settled Friday at $84.45 on the New York Mercantile Exchange — 51 cents less than the prior week.

CNN Money: Gas Prices May Have Peaked for Summer

April 27, 2012 by · Comments Off on CNN Money: Gas Prices May Have Peaked for Summer 

Industry sees mellowing of oil prices.

A surge in gasoline prices earlier this year sparked talk of $5 a gallon by this summer, but prices at the pump have been ticking lower in April, and it appears they’ll continue falling as the driving season approaches.

CNN Money reported that this rosy scenario is prompted by the fact that the price for one of the most common types of gasoline futures traded in New York has dropped 30 cents, going from over $3.40 a gallon at the beginning of April to $3.10 a gallon Wednesday (April 25).

Futures contracts are financial instruments that buyers and sellers of large amounts of gasoline — or any commodity — use to set prices. Analysts say the current drop in gas price futures should begin to appear in gas prices at the service station over the next few weeks.

“We’re certainly going to see prices move lower at this point,” said Stephen Schork, publisher of the industry newsletter the Schork Report. While retail prices are expected to move lower, Schork said the decline might not be as steep those seen in the futures markets.

The main reason for lower gasoline futures prices is the declining cost of Brent crude and other crude oil that gasoline is made from.

Brent crude has dropped from over $125 a barrel in early April to under $120 currently, largely a a result of tensions easing with Iran over its nuclear program. Recent signs of a slowing global economy have also helped push down prices.

Gasoline prices at the pump have begun a similar decline. While much hype was made earlier this about how gas had run up further and faster than any time before and may even reach a new all-time high of over $4.11 gallon, prices have been slowly declining since touching $3.95 a gallon at the beginning of April. Gas prices currently sit at $3.84, according to AAA.

“If we don’t have any supply issues or refinery outages, we’ve seen the highs for the summer,” said Schork.

Gasoline Pump Prices Revive ‘Staycation’ Talk

March 28, 2012 by · 1 Comment 

Source: AAA

Rising U.S. gasoline prices will probably prompt Americans to visit tourist sites closer to home and limit their itineraries, travel adviser AAA said.

Bloomberg reported that Mark Brown, executive vice president for the non-profit group with more than 53 million members, told a House Natural Resources Committee hearing that its members were making adjustments as gasoline approached $4 a gallon.

“Members are not canceling their vacation driving plans at this time, but may scale back the distances and the number of destinations,” Brown said in written testimony distributed before a Tuesday (March 27) hearing in Washington, D.C.

Crude oil advanced more than 8% this year, and the average price for unleaded gasoline at the pump climbed about 19 percent to $3.90 a gallon Tuesday, according to AAA data.

More than half of Americans who plan to travel by car this summer said further gasoline-price increases would make them take fewer trips or spend less on meals, shopping and entertainment, Gilliland said, citing data from the U.S. Travel Association.

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