Gasoline prices began the new year slightly higher, pushing the average U.S. retail price for regular gasoline to $2.65 a gallon on Friday. The New Year’s Day gas price rose 6 cents since Christmas Day, $1.03 or 64% higher than last New Year’s Day and $1.46 below the record set in July 2008. Looking back at 2009 gas prices, the year’s lowest average price per gallon was recorded on January 1 at $1.62. The year’s highest recorded price came on October 30 at $2.70. Considering prices climbed above $4.00 a gallon in 2008, it is somewhat notable that 2009 prices never rose above the $2.70 mark.
Crude oil continued its rise this week, increasing for seven straight sessions and reaching $80 a barrel intraday for the first time since November, to close at $79.36 a barrel Thursday following a second straight shortened trade week. A combination of light trading, oil stock drawdown and dollar weakness has helped oil prices approach the $80 mark. Crude oil ended the year up 78% from the $44.60 settlement on December 31, 2008, the biggest percentage calendar rise in a decade, due in part to a combination of OPEC supply cuts, emerging market demand and emerging signs of global economic recovery. Despite its significant annual increase, oil prices were still almost half the all-time high of $147.27 a barrel hit in July 2008.
In its final report of 2009, the Energy Information Administration (EIA) announced crude oil stockpiles fell 1.5 million barrels to 326.0 million barrels, against a forecasted 2.0 million barrel drawdown. Gasoline stockpiles fell 300,000 barrels to 216.0 million barrels, against analyst estimates for a 500,000 barrel increase.
The Weekend
“Gas prices crept up slightly this week as motorists return home from holiday travel,” said David Weinstein, Manager of Public and Government Affairs for AAA Mid-Atlantic. “This trend is in line with the recent increase in crude oil prices. Looking ahead to 2010, the speed and strength of the global economic recovery will be the major factor in determining the direction of crude oil and gasoline prices.”
The Week Ahead
Looking ahead to 2010, analysts expect it to be a year of transition, addressing the demand concerns of 2009 and the supply concerns of 2011. In addition, geopolitical developments in oil producing nations are expected to have heightened importance. Currently on the international front, turmoil in OPEC members Iran and Nigeria have the potential to impact crude oil prices (and in turn gasoline prices) in the new year. Although the major factor in determining the direction of crude oil and gasoline prices in the new year will continue to be the speed and vigor of the global economic recovery.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
1/03/10 | Week Ago | Year Ago | |
National | $2.66 | $2.60 | $1.64 |
New Jersey | $2.53 | $2.49 | $1.48 |
Trenton | $2.54 | $2.51 | $1.51 |
Cape May County | $2.49 | $2.43 | $1.44 |
Burlington County | $2.52 | $2.47 | $1.46 |
Middlesex, Somerset, Hunterdon | $2.53 | $2.49 | $1.48 |
Monmouth, Ocean Counties | $2.51 | $2.46 | $1.45 |
Crude Oil | $79.36 per barrel (close on Friday) | $78.05 per barrel | $45 per barrel |
