Gasoline prices saw significant increases this week in conjunction with the recent movement in crude oil above the $80 a barrel mark. From a recent low point of $2.69 on September 27, the national average price of regular grade gasoline has increased 9 cents to $2.78 Friday (a 3.5% increase). Friday’s average price was 31 cents higher than year ago prices, yet $1.33 below record high prices set in July 2008. Despite recent increases, the national average gas price has remained below $2.90 for 21 weeks in a row.
Crude oil continued to trade above the $80-mark this week, due mostly in part to a weak U.S. dollar, jumping to a five-month intraday high of $84.43 Thursday following a report that showed a significant drop in U.S. gasoline stockpiles (signaling demand could be on the rise). However, crude slipped back toward $80 Friday to close at $82.65. News that the U.S. economy did not add jobs during September (reductions in government payrolls offset modest gains in private sector hires), coupled with a strengthened U.S. dollar contributed to oil’s late week retreat.
In its weekly report, the Energy Information Administration’s (EIA) data showed crude oil stocks rose 3.1 million barrels to 361 million barrels, 10 times more than expected. Gasoline stocks fell 2.65 million barrels to 220 million barrels, also more than expected.
The Weekend
“Motorists have undoubtedly noticed the recent spike in prices at the gas pumps this week, jumping 9 cents a gallon nationally,” said Tracy Noble, Public Affairs Manager for AAA Mid-Atlantic. “When crude oil prices move above the $80-mark, as they did late last week and have remained since, it sends an immediate shock to the system. Crude oil is the biggest single component of gas prices, making up to 69 percent of the price to consumers at the pump, and when it surges gas prices follow suite.”
The Week Ahead
Oil Price Exporting Countries (OPEC) is scheduled to meet on October 14th in Vienna, Austria, to discuss crude oil output and production levels, but is expected to maintain the status quo. OPEC has indicated it is not interested in higher prices, with one country’s oil minister conceding that keeping crude in the $70-to-$80 range is “as close to perfect as possible.”
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
10/08/10 | Week Ago | Year Ago | |
National | $2.78 | $2.69 | $2.47 |
New Jersey | $2.62 | $2.50 | $2.29 |
Trenton | $2.64 | $2.52 | $2.29 |
Cape May County | $2.60 | $2.51 | $2.28 |
Burlington County | $2.59 | $2.45 | $2.21 |
Middlesex, Somerset, Hunterdon | $2.63 | $2.51 | $2.30 |
Monmouth, Ocean Counties | $2.60 | $2.48 | $2.25 |
Crude Oil | $82.65 per barrel (close on Friday) | $81.58 per barrel | $72.00 per barrel |
