AAA: Gasoline Prices Fall For 5th Week In A Row

For the fifth week in a row, the average price of a gallon of gasoline fell during the week from coast to coast. Back-to-back snowstorms of historic proportions in the Mid-Atlantic region left motorists foiled, frustrated and, in some cases, stuck in their tracks. Measurable snowfall in 49 states caused gasoline consumption to decline for the second week in a row. Nationwide, gas purchases declined 3.7 percent for the week ended February 5. Snowfall was the biggest factor. It was down 4.2 percent in the Mid-Atlantic region this week.
Since then, gasoline prices declined three cents a gallon for the week ended February 12. Pump prices have dipped 13 cents in the last month, falling from $2.76 a gallon to $2.63 per gallon as of this past Friday. It is a harbinger of things to come? However, the current price of a gallon of unleaded regular is still 68 cents higher than a year ago prices. Although the demand for gasoline is flat, crude oil prices rallied during the week, rising 10 cents a gallon since last Friday. However, the week-long rally stalled in early trading during this Friday’s session. After topping $75 per barrel on Thursday, crude prices closed at $74.01 /bbl for the week.
As always, the price of crude oil is the major factor in determining the price of gasoline at the pump. Other factors include proximity of supply, supply disruptions, and competition in local markets. During formal trading sessions traders trained their eyes on short-term and long-term trends, impacting crude and pump prices, including a weak equities market, upheaval on the stock market, continued unrest in Nigeria, and an anemic global and US economy.
During the previous week, inventories of gasoline blendstocks rose by 1.9 million barrels to 141.2 million barrels. “That was 20.2 percent above the year-ago level,” notes the American Petroleum Institute (API). Meanwhile, gasoline production was down, according to API data.
“National average retail gasoline prices continue to bounce around in a 25 cent band between $2.50 and $2.75,” observes AAA. “Prices have maintained this band since the middle of 2009, with a few exceptions. Retail price trend lines suggest that prices will remain in this band for the foreseeable future, barring unforeseen circumstance.”
The Weekend
“Heading into the weekend there was snowfall in 49 of the 50 states. Area residents will spend most of the weekend digging out from the Blizzard of 2010, and in all likelihood gasoline demand won’t increase at all,” said Tracy Noble, Public Affairs Specialist for AAA Mid-Atlantic. “This year Valentine’s Day falls in the middle of a three day holiday weekend. However, it is unlikely that travel will increase over the weekend, holding down fuel prices. Given travel conditions, it is likely that many will cancel their plans for a romantic weekend getaway.”
The Week Ahead
Given the width and breadth of the massive snowstorm, look for reports of spot outages and supply interruptions at some gas stations across the country and region. Icy roads and road conditions could challenge the ability of some fuel delivery trucks to reach some gasoline stations. Motorists should avoid panic buying and topping off their gas tanks. In all probability, demand for gasoline will remain soft this week. Retail gasoline prices will likely continue to drop a few pennies more in the coming week, due to lingering wintry weather conditions across a huge swath of the nation.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)