The summer driving season is in full swing, with Memorial Day weekend behind us and the Fourth of July weekend approaching, motorists continue to enjoy the decline in prices at the pump. Gas prices have dropped 23 cents (8%) since reaching a 2010 high of $2.93 a gallon on May 6th to $2.70 a gallon Friday. The $2.70 a gallon mark is also the 2009 high price for gasoline, which illustrates that as prices drop they continue to close the gap on year-ago prices. Gas prices are merely 7 cents higher than last year at this time, but still $1.41 less than the record of $4.11 set in July 2008.
Crude oil continued to trade in the $70 to $74 range for most of the week, before breaking through the $75 a barrel mark on Thursday for the first time since June 4, a weekly gain of about 5% and the second weekly gain in six weeks. Support for higher crude oil prices stemmed from investor confidence in China’s growth, a drop in U.S. jobless claims, the dollar’s weakness against the euro, and the International Energy Agency’s (IEA) raised global demand forecast for 2010 (citing increases in fuel use by the world’s top two oil users – the United States and China). Crude oil closed the week at $73.78.
In its weekly report the Energy Information Administration’s (EIA) data showed crude oil stocks fell 1.8 million barrels to 361.4 million barrels, more than the expected 900,000 barrel dip. Gasoline stocks remained unchanged at 219 million barrels. Gasoline demand was measured at 9.194 barrels per day, muddled by the typical transition from a peak driving season week (Memorial Day) to the more sluggish early June demand patterns. Contrary to the IEA, the EIA lowered its global demand forecast for 2010.
The Weekend
“Declining prices at the pump are certainly welcome news for summer motorists,” said Tracy E. Noble, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Gas prices have continued their decline for the past month, dropping more than 23 cents since early May. While all eyes continue to monitor the oil spill in the Gulf of Mexico, gas and crude oil prices should remain unaffected in the short term.”
The Week Ahead
Efforts to contain and clean up the biggest oil disaster in U.S. history at the Deepwater Horizon site in the Gulf of Mexico continue. While crude oil and gasoline prices should not be affected in the short term, investors and analysts will continue to monitor the situation.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
06/11/10 | Week Ago | Year Ago | |
National | $2.70 | $2.73 | $2.63 |
New Jersey | $2.60 | $2.64 | $2.45 |
Trenton | $2.63 | $2.68 | $2.48 |
Cape May County | $2.57 | $2.59 | $2.43 |
Burlington County | $2.54 | $2.57 | $2.44 |
Middlesex, Somerset, Hunterdon | $2.61 | $2.65 | $2.46 |
Monmouth, Ocean Counties | $2.58 | $2.63 | $2.45 |
Crude Oil | $73.78 per barrel (close on Friday) | $71.51 per barrel | $50 per barrel |
