Although gas prices have stayed within a 15-cent band for the first two months of 2010 (between $2.61 and $2.76), recent increases in crude oil prices have begun to affect prices at the pump. Gas prices have begun to creep back up, with the national average price of regular grade jumping 8 cents this week to $2.70 on Friday. Despite the increases, prices remain 82 cents below year ago prices and $1.41 below the record price set in July 2008.
Crude oil broke through the pivotal $80-ceiling to hit a 6-week high of $80.51 (crude last settled above $80 on January 12), but retreated throughout the week. As seen over the past several months, oil prices are often driven by broader economic issues. A surprise jump in U.S. unemployment, low consumer confidence numbers (the lowest reading since last April) and a decline in home prices, among other factors, suggested to investors that the world’s biggest energy consumer was recovering more slowly than expected. After flirting with the $80-mark since Monday, crude settled at $79.66 at Friday’s close.
In its weekly report, the Energy Information Administration (EIA) showed crude stocks rose 3.0 million barrels to 337.5 million barrels last week, much more than the forecast for a 2.0 million barrel build and contradicting a report from the American Petroleum Association (API) of a 3.1 million barrel build. Gasoline stocks fell 900,000 barrels, against a forecasted 400,000 barrel build and API’s reported 1.7 million barrel rise.
The Weekend
“After weeks of relatively stable gas prices, we’ve seen prices creep up pennies at the pumps this week,” said Tracy Noble, Public Affairs Specialist for AAA Mid-Atlantic. “If crude oil prices continue to flirt with the $80-mark in the week ahead, it can be expected that gas price increases will follow continue.”
The Week Ahead
As the Mid-Atlantic region begins to look past a winter of record-breaking snowfall, the spring driving season is just around the corner. Traditionally a period marked by increased gasoline consumption, investors may begin to factor in these projections when trading crude oil, hence price increases in the weeks to come for both crude oil and gasoline prices.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
2/28/10 | Week Ago | Year Ago | |
National | $2.70 | $2.64 | $1.90 |
New Jersey | $2.56 | $2.52 | $1.76 |
Trenton | $2.57 | $2.53 | $1.79 |
Cape May County | $2.54 | $2.50 | $1.73 |
Burlington County | $2.56 | $2.50 | $1.73 |
Middlesex, Somerset, Hunterdon | $2.57 | $2.53 | $1.77 |
Monmouth, Ocean Counties | $2.54 | $2.49 | $1.75 |
Crude Oil | $79.66 per barrel (close on Friday) | $79.81 per barrel | $43 per barrel |
