AAA: Gas Price Stability Continues

Gas price stability continued for the sixth consecutive week. The average U.S. retail price for regular gasoline was $2.64 a gallon on Friday, up just 1 cent from last week, 85 cents above year-ago prices and $1.47 below the record set last July.
The continued gas price stability has been matched in recent weeks with modest moves in crude oil prices. After trading just shy of the $80 mark early in the week, crude oil fell for a third day on Friday to settle at $75.47, under pressure from huge levels of inventories and a strong dollar following the latest employment data released. U.S. employers cut only 11,000 jobs in November, the best showing in nearly two years, and the jobless rate edged down slightly to 10.percent (from 10.2 percent last month) Unemployment is not good for oil consumption as it’s typically followed by weak demand.
In its weekly report, the Energy Information Administration (EIA) data showed crude stocks rose 2.1 million barrels to 339.9, much more than the forecast for a 400,000-barrel build, but less than the American Petroleum Institute’s (API) reported rise of 2.9 million barrels. Gasoline supplies also rose 4.0 million barrels to 214.1 million barrels, against a forecast for a 1 million barrel build and larger than API’s reported 3.4 million barrel build. The EIA’s data continued to reiterate demand weakness. Nationwide demand fell 149,000 barrels per day (bpd) to 8.943 million bpd.
The Weekend
“With the holiday shopping season in full swing, motorists welcome continued stability in pump prices,” said David Weinstein, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Gas price stability, especially during the holiday season, affords consumers confidence to move forward with travel and shopping plans, rather than dig deeper into their pockets when filling up at the pump.”
The Week Ahead
Looking ahead to the OPEC meeting on December 22 in Angola, oversupply and the fragile state of the global economy will be the key issues. OPEC’s secretary general Abdullah al-Badri has cautioned the group as it decides its oil output policy as it needs to balance signs of economic recovery and abundant supplies. He noted oil inventories remain above their five-year average and there were 165 million barrels of crude and products floating at sea, equal to almost two days’ global demand. Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah has told reporters the OPEC nation prefers oil prices remain in the $70 to $80 a barrel range and he supports OPEC leaving crude output levels unchanged.