The Week Declining crude oil prices in recent weeks continue to drive gas prices down, an encouraging factor for motorists looking to take to the road for the upcoming Labor Day weekend.  The national average price for regular grade gasoline dropped four cents this week to $2.68 a gallon Friday – a price not seen since February 24 of this year – six cents higher than the same date last year, but still $1.43 less than the record of $4.11 set in July 2008.  This summer’s gas prices have remained relatively stable, settling between $2.68 and $2.78 a gallon this season.  Gas prices have been on the downside ever since Memorial Day weekend, which looking back was the peak of the summer driving season.

 

Crude oil continued its decline early in the week, dropping to an 11-week intraday low of under $71 a barrel Wednesday, driven by lingering doubts over the U.S. economic recovery and, in turn, the outlook for oil demand.  Although crude rallied mid-week after news of a positive U.S. jobs report, where claims fell for the first time in a month, poor housing numbers and a revised gross domestic product continue to signal lackluster U.S. economic recovery.  And weakness in the consumer sector has slowed U.S. energy demand growth.  Also supporting oil’s late week recovery were three tropical systems churning in the Atlantic Ocean.  Crude oil prices have declined about $9 from a peak near $83 on August 14, to $75.17 at Friday’s close.

 

In its weekly report, the Energy Information Administration’s (EIA) data showed crude oil stocks rose 4.1 million barrels to 358.3 million barrels.  Gasoline stocks rose 2.27 million to 225.6 million barrels.  The EIA also reported gasoline demand drifted 84,000 barrels per day (bpd) lower to 9.375 million bpd.

 

The Weekend “As motorists gear up for the final three-day weekend of summer, they have undoubtedly noticed the recent decline in gas prices,” said Ragina C. Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “Prices at the pump have followed crude oil declines in recent weeks, dropping to their lowest point of the summer this weekend.  AAA expects the national average gas price to be between $2.65 and $2.75 per gallon during the upcoming Labor Day holiday weekend.”

 

The Week Ahead AAA is projecting the number of Americans traveling for the upcoming Labor Day holiday weekend will increase 9.9 percent from 2009, with approximately 34.4 million travelers taking a trip at least 50 miles away from home.  Last year, 31.3 million Americans traveled during the Labor Day holiday.  The increase in travel for Labor Day appears to be the result of economic improvement over the past year.  AAA expects the national average price of self-serve regular gasoline to be between $2.65 and $2.75 per gallon during this holiday weekend.

 CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high) 

 

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.  To find prices at individual gas stations, go to AAA Fuel Finder:http://www.aaamidatlantic.com/Outreach/GasInfo

The Week

There were no surprises at the pump for motorists who took to the roads this July.  Gas prices were stable throughout the month, ranging from $2.70 to $2.75 a gallon nationally.  The national average price for regular grade gasoline closed out the month at $2.74 Saturday, 22 cents higher than the same date last year, but still $1.37 less than the record of $4.11 set two years ago this summer.

While making several runs at the $80 mark this week, crude oil maintained its recent trading range of $70 to $80, closing the week at $78.95.  Concerns about economic recovery in the second half of the year, were fueled by data showing economic growth in the U.S. slowed in the second quarter and the pace of consumer spending eased, raising demand concerns.  The gross domestic product expanded at a 2.4% annual rate in the second quarter, under expectations, after a revised 3.7% growth in the first quarter.  Little evidence of a robust long-term economic recovery, in addition to high crude inventories and weak demand numbers, have contributed to the relative stability of oil prices this summer.

The Energy Information Administration’s (EIA) data showed a surprising 7.3 million barrel crude stockpile build to 360.8 million barrels, against a small dip expected by analysts.  Gasoline stocks rose 91,000 barrels to 222.245 million barrels, despite a robust gasoline demand level of 9.632 million barrels per day, the highest weekly figure of the year.

The Weekend

“Gas price stability continued throughout the month of July, a welcome trend for motorists who took advantage of the summer driving season,” said Ragina C. Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “Demand for gasoline continued to rebound this week, posting its highest weekly figure of the year.  However, slow economic recovery and high crude oil stockpiles continue to keep crude oil prices in check, which filters down to stability at the gas pumps – a good thing as the summer driving season heads into August.”

The Week Ahead

Gasoline and crude oil stability could change should tensions continue to escalate between Columbia and Venezuela.  Columbia has made recent charges that Venezuela is harboring Colombian rebels and has threatened a military response.  Venezuela President Hugo Chavez has said he will cut oil supplies to the U.S. if such an attack occurs.  Venezuela remains one of the largest U.S. oil suppliers.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

                         8/01/10           Week Ago        Year Ago       
National          $2.74              $2.74                   $2.53  
Maryland        $2.67              $2.66                   $2.44  
Baltimore       $2.65               $2.64                   $2.42  
Cumberland   $2.68               $2.66                  $2.52  
Hagerstown     $2.68              $2.66                   $2.48  
Salisbury         $2.56              $2.53                   $2.33  
Washington Suburbs (MD only)    $2.70   $2.69   $2.48  
Crude Oil       $78.95 per barrel (close on Friday)     $78.98 per barrel       $67 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.

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

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