The Week

Gas prices remain at historic highs for early January, up by double-digits in many part of the country since the beginning of the year.  Contributing to the increase was the repeal of the ethanol tax credit, causing gas prices to increase nearly 4.5 cents per gallon.  The national average for regular grade rose 4 cents this week (11 cents since January 1) to $3.39 per gallon Friday.  Prices are 13 cents above month ago prices and 29 cents above year ago prices, yet remain 72 cents below the all-time record high of $4.11 set three and a half years ago.

 

Crude oil is also at the highest level ever to start a new year.  The commodity jumped to over $102 per barrel mid-week, the highest price since last May when gas prices peaked at $3.98 per gallon nationally and over $4.00 per gallon in many parts of the country, and a huge increase over last October’s low of $76.29.  Increased global demand and optimism over U.S. economic recovery, coupled with a possible shut down of Nigerian oil exports (the top oil producer in Africa and major supplier to the U.S and Europe) and western embargos against Iran that could lead the Middle Eastern nation to block the Strait of Hormuz, supported crude oil’s increases through mid-week.  However, late Thursday reports emerged that the European Union would delay its embargo against Iranian oil imports up to six months, sending crude oil down 2.5% to $99.10, the first time the commodity settled below $100 per barrel since December 30.  Crude oil closed at $98.70 Friday, a three-week low.

 

Weekly data from the Energy Information Administration (EIA) showed the nation’s crude oil supplies rose 5 million barrels to 334.6 million barrels, 0.5 percent above year-ago levels.  Analysts had expected a drop of 1 million barrels.  Gasoline supplies rose by 3.6 million barrels to 223.8 million barrels, 0.3 percent higher than year-ago levels and exceeding analysts’ expectations of a 1.75 million barrel increase.  Demand for gasoline over the last four weeks was 4.8 percent lower than the same period a year ago, averaging 8.6 million barrels a day.

 

The Weekend

“So far this year we’ve seen record-high gas prices supported by record high crude oil prices for early January – not good news for motorists who typically see lower prices in January due to curbed demand during the winter months,” said Ragina C. Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “Given current market conditions and international tensions, prices at the pump will likely surpass the $4.00 per gallon mark before the weather warms up this spring, well ahead of the annual summer price peak, paving the way for record-breaking gas prices this year.”

 

The Week Ahead

Analysts believe, and market indicators support, it will be a tumultuous year for gas prices.  Prices will undoubtedly reach higher highs than 2011, and potentially lower lows.  Last year’s high was $3.98 in May and the year’s low was $3.07.  Looking back to 2008, the national gas average set a record at $4.11 per gallon in July, but many forget that by December the national average dropped to $1.61 per gallon.  And when prices surpassed the $4.00 mark in 2008, they lingered there for less than two months.  Oil Price Information Service (OPIS) chief analysts Tom Kloza doesn’t anticipate a long spike this year, but believes gas prices will build through the spring before tailing off in the latter part of 2012.

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

 

	1/15/12	Week Ago	Year Ago
National	$3.39	$3.37	$3.10
Maryland	$3.39	$3.37	$3.09
Baltimore	$3.38	$3.36	$3.09
Cumberland	$3.39	$3.36	$3.11
Hagerstown	$3.39	$3.36	$3.11
Salisbury	$3.35	$3.38	$2.06
Washington Suburbs (MD only)	$3.41	$3.38	$3.09
Crude Oil	$98.70 per barrel (at Friday’s close)	$101.56 per barrel	$91 per barrel

 

 

AAA is the most comprehensive resource for gas prices.  Unlike the Lundberg Survey of 7,000 gas stations, AAA reports reflect actual prices from credit card transactions at more than 100,000 gas stations in the U.S. No other fuel price research tool has such a large, automatically generated database that is especially useful in generating local average prices which are more meaningful for consumers. 

 

Gasoline and Crude Oil Price Increases Continue into 2012

 

The Week

Average U.S. gasoline prices began 2012 just under $3.28 gal, the highest number ever to mark the beginning of a year and the fifth straight weekly increase in price.  Last year’s $3.07 per gallon high is now relegated to second place.  The U.S. average price for regular self-service gasoline was $3.51 in 2011, the highest annual number of all time, and more than twice the price average seen in the first four years of the century.  The national average for regular grade rose 8 cents this week to $3.35 per gallon Friday.  Prices are 6 cents below month ago prices and 27 cents above year ago prices, yet remain 76 cents below the all-time record high of $4.11 set in July 2008.

 

Crude oil began the new year above the $100 per barrel mark, lifted by tensions in the Persian Gulf as Iran threatens to shut down the Strait of Hormuz following economic sanctions against the country by the U.S. and other western nations.  Any disruption to this key transit point would have a major impact on global oil markets, pushing prices sharply higher.  While pipeline alternatives exist, they do not have the capacity to compensate for the loss of 16 to 17 million barrels per day (bpd) of crude oil that travels through the strait.

 

After trading as high as $103 per barrel mid-week, crude oil prices slumped below $102 a barrel Thursday as a stronger U.S. dollar and worries over weak U.S. oil demand eclipsed concerns over the potential disruption to Iran's oil supplies.  Weekly data from the Energy Information Administration (EIA) noted demand for gasoline, the most widely used petroleum product, was at a 13-year low for the last week of the year, and was 3.4% below a year ago when 30 percent of motorists couldn’t travel on the roads that were covered by 25 to 35 inches of snow.  Despite ups and downs during the shortened trade week, crude oil remained above the $100 per gallon mark to close at $101.56 Friday.

 

In addition to weekly demand figures, the EIA also reported crude oil inventories rose 2.2 million barrels to 329.7 million barrels, against expectations for a 900,000 barrel drop. The EIA also noted gasoline stocks rose 2.5 million barrels to 220.2 million barrels.

 

The Weekend

“One week into the new year and we’ve picked up right where we left off in 2011 in terms of gasoline and crude oil prices – when crude oil prices rise, gasoline prices follow suit,” said Ragina C. Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “And such is the case as gas prices continue to rise for the fifth consecutive week on the heels of rising crude oil prices, atypical of seasonal trends.  Analysts and motorists alike are certain to keep watch of both well into 2012, as many industry experts say we are likely to see gas prices break through the $4.00 per gallon mark by spring and ultimately set new record highs should this trend continue.”

 

The Week Ahead

When looking at broad supply and demand trends, and the flow of imports and exports once the spring switch to summer blends is accomplished, many speculate that gasoline supplies will tend to be in surplus, rather than scarce for the last seven or so months of 2012.  After a spring and summer of potential record-high gas prices, there is an excellent chance that parts of the country will see sub-$3 gallon gasoline in the second half of 2012.  However, any unforeseen natural disaster or international political issue(s), such as increased tension in the Middle East would ultimately send gas prices higher.

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

 

	1/8/12	Week Ago	Year Ago
National	$3.37	$3.28	$3.09
Maryland	$3.37	$3.26	$3.08
Baltimore	$3.36	$3.24	$3.08
Cumberland	$3.36	$3.27	$3.14
Hagerstown	$3.36	$3.26	$3.11
Salisbury	$3.38	$3.26	$2.06
Washington Suburbs (MD only)	$3.38	$3.28	$3.09
Crude Oil	$101.56 per barrel (at Friday’s close)	$98.83 per barrel	$88 per barrel

 

 

AAA is the most comprehensive resource for gas prices.  Unlike the Lundberg Survey of 7,000 gas stations, AAA reports reflect actual prices from credit card transactions at more than 100,000 gas stations in the U.S. No other fuel price research tool has such a large, automatically generated database that is especially useful in generating local average prices which are more meaningful for consumers. 

The Week

The cost of gas is the lump of coal in motorists’ Christmas stockings this year, and although pump prices have declined of recent, consumers will still end up paying the highest ever price for gas at Christmas in history.  The national average for regular grade dropped 4 cents from last week to $3.25 per gallon Friday.  Prices are 15 cents below month ago prices.  Just before Christmas 2010, the average price was $2.98 (27 cents lower) and $2.59 (66 cents lower) per gallon two Christmases ago in 2009.

 

Crude oil plunged to its lowest level in six weeks this week as industrial production declined for the first time since April in the U.S., the world’s largest oil-consuming country, and the strength of the U.S. dollar against the euro as the euro region’s ability to manage its debt troubles mounted.  A strong U.S. dollar will suppress crude oil prices.  Prices are down 5.3 percent since December 9, heading for a second weekly decline and the biggest since September 23.  Crude is 3.1 percent higher this year after climbing 15 percent in 2010.  Some analysts cautioned there could be further losses in store for crude, which would help to push gas prices further down.  Crude oil closed down for the second straight week at $93.53 Friday.

 

The U.S. Energy Information Administration’s (EIA) weekly report showed crude stocks dropped 1.9 million barrels to 334.2 million barrels.  Gasoline stocks rose 3.8 million barrels to 218.8 million barrels.  Gasoline demand slipped 8.666 million barrels per day (bpd), representing a year-over-year drop of 683,000 bpd from 2010 or 7.3 percent.  Total petroleum demand last week was measured at 18.4 million bpd, down by a stunning 1.8 million bpd from the same week last year.  The four-week average petroleum demand level is down 5.6 percent from last year, thanks to a 4.5 percent drop in domestic gasoline consumption; a 14.3 percent plunge in residual fuel; and an 18.7 percent drop in the other oils category.

 

The Weekend

“Gas prices continue to decline with less than a week until the start of the year-end holiday travel period, which is welcome news for motorists planning to take to the roadways,” said Ragina C. Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “Yet despite recent declines, motorists will be paying the highest ever gas prices at Christmas.  However that doesn’t seem to be deterring over 83 million Americans (91 percent of holiday travelers) who plan to take to the roadways in the coming weeks.”

 

The Week Ahead

AAA forecasts 91.9 million Americans will travel 50 miles or more from home during the 2011-12 Year-End holiday travel season, a 1.4 percent increase over the 90.7 million people who traveled one year ago. This year’s expected Year-End holiday travel volume is the second highest in the past decade and represents 30 percent of the total U.S. population.  Approximately 83.6 million people (91 percent of holiday travelers) plan to take to the nation’s roadways this Year-End holiday travel season, a 2.1 percent increase compared to 2010-11 when the number of auto travelers totaled 81.9 million.  This year’s projected automobile travel volume is the second highest in the past decade and only 100,000 less than the 2006-07 auto travel peak of 83.7 million.  Automobile travel remains the preferred choice of transportation for 2011-12 Year-End holiday travelers as nearly 27 percent of the total U.S. population will hit the road. 

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

 

	12/18/11	Week Ago	Year Ago
National	$3.23	$3.28	$2.98
Maryland	$3.21	$3.25	$3.00
Baltimore	$3.18	$3.22	$3.00
Cumberland	$3.32	$3.35	$3.06
Hagerstown	$3.22	$3.26	$3.00
Salisbury	$3.16	$3.20	$2.95
Washington Suburbs (MD only)	$3.25	$3.29	$3.01
Crude Oil	$93.53 per barrel (at Friday’s close)	$99.41 per barrel	$88 per barrel

 

 

AAA is the most comprehensive resource for gas prices.  Unlike the Lundberg Survey of 7,000 gas stations, AAA reports reflect actual prices from credit card transactions at more than 100,000 gas stations in the U.S. No other fuel price research tool has such a large, automatically generated database that is especially useful in generating local average prices which are more meaningful for consumers.

 

To find prices at individual gas stations, go to AAA Fuel Finder:

http://www.aaamidatlantic.com/Outreach/GasInfo

  

 

The Week

Gas prices remain stable two weeks ahead of the year-end holiday travel period, which is welcome news for cash-strapped motorists juggling holiday shopping and travel plans in the coming weeks.  U.S. gasoline prices today are lower than they have been since day 10 of the Libyan civil war (Feb. 24, 2011).  The national average for regular grade gasoline remained unchanged over last week at $3.29 per gallon Friday.  Prices are 14 cents below month ago prices and 31 cents above year-ago prices, yet 82 cents below the all-time high of $4.11 per gallon set in July 2008.  In fact, in a strange statistical coincidence, the year-on-year premium for motor fuel has slipped to its smallest increment since Dec. 6, 2010. Gasoline today costs 32.41cts/gal more than it did on this day last year, and on this day last year, gasoline cost 31.8cts/gal more than it fetched on December 6, 2009. 

 

Crude oil spent seven consecutive days trading above the $100 per barrel mark before reversing its upward climb below the triple-digit threshold by week’s end.  After trading as high as $102 per barrel, the commodity dropped to $98 Thursday, taking aim at its biggest weekly decline since September.  A weak U.S. dollar, data showing U.S. jobless claims fell to a nine-month low and optimism the EU summit would unveil a coherent plan to contain the Eurozone debt crisis all contributed to crude’s positive movement, however prices edged lower Thursday and Friday following U.S. Department of Energy reports that inventories unexpectedly rose last week, trumping expectations for a decline.  Also contributing to crude’s decline was a strengthened U.S. dollar, speculation that fuel demand will falter amid continued signs Europe is struggling to get its sovereign debt crisis under control.  Lastly, risks of a supply disruption from Iran were renewed as European Union leaders were expected to call for more sanctions against the Middle East nation at the EU summit.  However, they are not likely to make an explicit call yet for an embargo on Iranian crude oil, amid mounting Western concerns that the OPEC producer has worked to design a nuclear weapon.  Crude oil closed the week on the biggest weekly decline, down $1.58 per barrel on the week to $99.41 Friday.

 

The U.S. Energy Information Administration’s (EIA) weekly report showed crude stocks rose 1.3 million barrels to 336.1 million barrels.  Gasoline stocks rose 5.1 million barrels to 215.0 million barrels.  Gasoline demand slipped by 196,000 barrels per day (bpd) to 8.574 million bpd, 597,000 bpd below the same week in 2010.  There are two schools of thought when forecasting demand numbers for the remainder of the year.  Some analysts believe the next three weeks will see a seasonal life, while others say gas demand numbers will continue to drop to 8 million bpd into January.

 

The Weekend

“Gas prices continue to hold steady at the pump as the year-end holidays approach, which is welcome news for motorists looking to save a few pennies during the holiday shopping and travel season,” said Ragina C. Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “Demand remains low, which has been a key factor despite recently rising crude oil prices, and barring any unforeseen national or international situation that might influence a crude oil upswing, gas prices are likely to remain stable through the remainder of this year and into January.”

 

The Week Ahead

Looking ahead to 2012, the EIA revised its short term energy outlook.  The agency expects prices at the pump will remain at or below current levels until early spring 2012, when prices are expected to average $3.45 per gallon in 2012.  In addition, the EIA projects crude oil will average $98 per barrel in 2012, up from $91 per barrel in a previous estimate.  The forecast for 2012 gasoline prices targets a $3.45 per gallon average, with a second quarter peak of $3.51 per gallon and a drop to $3.38 per gallon in the second half of the year.  If the EIA is right, gasoline may actually turn out to be cheaper in 2012 than in 2011.

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

 

	12/11/11	Week Ago	Year Ago
National	$3.28	$3.28	$2.98
Maryland	$3.25	$3.24	$3.00
Baltimore	$3.22	$3.19	$3.00
Cumberland	$3.35	$3.40	$3.07
Hagerstown	$3.26	$3.29	$3.02
Salisbury	$3.20	$3.17	$2.95
Washington Suburbs (MD only)	$3.29	$3.28	$3.02
Crude Oil	$99.41 per barrel (at Friday’s close)	$100.96 per barrel	$88 per barrel

 

 

AAA is the most comprehensive resource for gas prices.  Unlike the Lundberg Survey of 7,000 gas stations, AAA reports reflect actual prices from credit card transactions at more than 100,000 gas stations in the U.S. No other fuel price research tool has such a large, automatically generated database that is especially useful in generating local average prices which are more meaningful for consumers.

 

To find prices at individual gas stations, go to AAA Fuel Finder:

http://www.aaamidatlantic.com/Outreach/GasInfo

 

The Week

Despite reaching the highest level ever for a Thanksgiving holiday weekend (averaging $3.31), gas prices continue their decline that began in mid-October and will likely continue in the week ahead, if not through the remainder of the year.  The national average for regular grade gasoline dropped 2 cents this week to $3.29 Friday.  Prices are 14 cents below month ago prices and 41 cents above year-ago prices, yet 82 cents below the all-time high of $4.11 per gallon set over three year ago.

 

Crude oil began the month of December above the $100 per barrel mark for just the third time since June.  One contributing factor to oil’s advance – U.S. retail sales jumped to a record $52.4 billion during the Thanksgiving holiday weekend, a signal of economic growth in the world’s biggest crude-consuming country.  There was also optimism that European countries are participating in discussions to fortify the tenuous sovereign debt situation in the euro zone as a reason for optimism that, rather than split apart, the European Union (EU) may be moving to strengthen ties.  In addition, concern for tension between Iran and European governments will disrupt oil exports from the Middle East supported crude oil’s rise.  By week’s end crude oil dipped slightly, but not below $100, following signs of economic slowdown in Europe, a weaker factory sector in China and new applications for unemployment in the U.S. rose for the second straight week, their highest level since late October.  Yet the commodity saw its first weekly gain in three weeks, closing at $100.96 Friday.

 

The U.S. Energy Information Administration’s (EIA) weekly report showed crude stocks rose 3.9 million barrels to 334.7 million barrels.  Gasoline stocks rose 213,000 barrels to 209.8 million barrels.  Petroleum demand continues to be poor at 17.946 million barrels per day (bpd), the poorest week for demand since June 19, 2009, when the U.S. economy was in the thick of the Great Recession.  More important, prior to the June 2009 dip, this week marks the first time since September 2001 demand has been so feeble.  Gasoline demand saw a slight upswing, rising 177,000 bpd last week, leading some to believe year-on-year deficits may be smaller than the 4 percent declines seen recently.

 

The Weekend

“Pump prices continue to decline, despite recent crude oil increases, which is welcome news for motorists who paid the highest prices ever for gasoline during the month of November,” said Ragina C. Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “As the year-end holidays approach, motorists wonder if the downward trend will continue and the good news, according to analysts, is gas prices will continue to level off in the coming weeks before reaching a price bottom at some point during the winter when demand is typically low.”

 

The Week Ahead

The last 35 days of 2011 might get close to the performance of the first 35 days when gasoline prices were barely above $3.00 per gallon, according to Tom Kloza, chief oil analysts for OPIS.  Kloza also suggests gas prices will average $3.25 per gallon through year’s end.  Somewhere between Black Friday and Ground Hog Day prices will bottom out, with January as the likely month for the price bottom, which will become the launch pad for a spring rally that could potentially add another $1.00 to wherever the bottom occurs.

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

 

	12/4/11	Week Ago	Year Ago
National	$3.28	$3.30	$2.92
Maryland	$3.24	$3.26	$2.93
Baltimore	$3.19	$3.22	$2.92
Cumberland	$3.40	$3.41	$2.98
Hagerstown	$3.29	$3.32	$2.97
Salisbury	$3.17	$3.20	$2.88
WashingtonSuburbs (MD only)	$3.28	$3.32	$2.93
Crude Oil	$100.96 per barrel (at Friday’s close)	$96.77 per barrel	$89 per barrel

 

 

AAA is the most comprehensive resource for gas prices.  Unlike the Lundberg Survey of 7,000 gas stations, AAA reports reflect actual prices from credit card transactions at more than 100,000 gas stations in the U.S. No other fuel price research tool has such a large, automatically generated database that is especially useful in generating local average prices which are more meaningful for consumers.

 

To find prices at individual gas stations, go to AAA Fuel Finder:

http://www.aaamidatlantic.com/Outreach/GasInfo

  

 

The Week

Although gas prices are at their highest level ever for this time of year, prices at the pump dropped slightly this week as they have for the past few weeks, bringing relief to many who are preparing to take to the roads for the upcoming Thanksgiving holiday weekend.  The national average for regular grade gasoline dropped 6 cents this week to $3.38 Friday.  Prices are 9 cents below month ago prices and 49 cents above year-ago prices, yet 73 cents below the all-time high of $4.11 per gallon set in the summer of 2008.

 

Crude oil soared above $100 per barrel Wednesday for the first time ever in November (and the first time since early June), yet gas prices are dropping at the pump.  Up 30 percent since early October, crude oil jumped on Wednesday following news of a pipeline reversal in the Midwest that will ease a glut of crude around the Cushing, Oklahoma delivery point.  However, concerns for the European economic outlook leading to further demand destruction caused prices to tumble 4 percent Thursday in the biggest one-day percentage loss since September 28, leading many analysts to believe crude will continue to fall in the coming week due to continued euro zone debt concerns.  Crude oil rebounded slightly Friday as the euro gained strength against the dollar, a sign the struggling European economy could possible be stabilizing.  Although crude crossed the $100 per barrel threshold mid-week, it closed the week at $97.67 per barrel, its worst weekly performance since late September.  Might recent crude oil increases drive gas prices higher in coming weeks?  Perhaps yes, however, despite increases in the commodity price throughout the past two weeks, gas prices have declined steadily. 

 

The U.S. Energy Information Administration’s (EIA) weekly report showed crude stocks fell by 1.1 million barrels to 337 million barrels.  Gasoline stocks rose 1 million barrels to 205.2 million barrels.  Gasoline demand continues to be very poor, dropping 46,000 barrels per day (bpd) to 8.625 million bpd, due to high gas prices and a weak economy.

 

The Weekend

“Despite gas prices at their highest level ever for the month of November, prices at the pumps have leveled off and even dropped slightly this week, which is welcome news to the millions of Americans who will take to the roads in the coming days for the Thanksgiving holiday,” said Ragina C. Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “Although economic concerns continue to influence financial decisions for many Americans, that’s not stopping many from gassing up to travel to be with family and friends next weekend.  What can motorists expect to pay at the pump throughout the holiday season?  Analysts believe gas prices will drop slightly through the remainder of the year.”

 

The Week Ahead

AAA forecasts 42.5 million Americans will travel 50 miles or more from home during the Thanksgiving holiday weekend, a four percent increase from the 40.9 million people who traveled one year ago. This is the first significant increase in any holiday travel this year. Despite potentially seeing the highest ever retail gas prices at Thanksgiving, approximately 38.2 million people (90 percent of holiday travelers) plan to take to the nation’s roadways this Thanksgiving holiday weekend, a four percent increase compared to 2010 when auto travelers totaled 36.8 million. Automobile travel remains the preferred choice of transportation for holiday travelers as it is often more affordable, convenient and flexible.

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

 

	11/20/11	Week Ago	Year Ago
National	$3.36	$3.42	$2.88
Maryland	$3.32	$3.38	$2.87
Baltimore	$3.29	$3.36	$2.86
Cumberland	$3.46	$3.48	$2.92
Hagerstown	$3.36	$3.37	$2.91
Salisbury	$3.27	$3.36	$2.84
Washington Suburbs (MD only)	$3.36	$3.40	$2.88
Crude Oil	$97.67 per barrel (at Friday’s close)	$98.99 per barrel	$82 per barrel

 

 

AAA is the most comprehensive resource for gas prices.  Unlike the Lundberg Survey of 7,000 gas stations, AAA reports reflect actual prices from credit card transactions at more than 100,000 gas stations in the U.S. No other fuel price research tool has such a large, automatically generated database that is especially useful in generating local average prices which are more meaningful for consumers.

 

To find prices at individual gas stations, go to AAA Fuel Finder:

http://www.aaamidatlantic.com/Outreach/GasInfo