This Week In Petroleum |
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Released on May 21, 2008 Memorial Day Gasoline Prices
This year, daily retail gasoline prices reported by AAA have climbed every day since May 5, and EIA’s weekly retail gasoline survey has increased steadily since March 24. A dramatic increase in the price of crude oil, rather than the transition to summer-grade gasoline or the start of the peak summer driving season, has been the main driver in pushing gasoline prices higher so far this spring. The spot price of West Texas Intermediate crude oil, which is the U.S. benchmark for light, sweet crude oil, has risen steadily from $101.54 per barrel on March 31 to a record high of $128.93 per barrel on May 20. This difference of over $27 per barrel translates into about 65 cents per gallon. Meanwhile, EIA’s weekly retail gasoline survey shows that the U.S. average retail price for regular gasoline has increased by about 50 cents over the same period, increasing from $3.29 per gallon on March 31 to $3.79 per gallon on May 19. With the cost of crude oil currently accounting for more than 70 percent of the price of a gallon of gasoline, it is not surprising that consumers are paying more at the pump. Another factor that usually puts upward pressure on gasoline prices at this time of year is seasonally increasing demand. However, with gasoline demand showing slightly negative annual growth so far this year, gasoline prices are not feeling as much pressure from the demand side as they normally would ahead of Memorial Day. In fact, AAA is predicting an approximate one percent decline from 2007 in the number of Americans who will travel more than 50 miles from home by automobile over the holiday weekend. Heading into June, we can expect gasoline prices to continue increasing if crude oil prices continue to climb. Softer demand this spring has already had a dampening effect on gasoline prices, which would be higher than they currently are if year-on-year demand growth was near long-term norms. While that might sound like cold comfort to consumers, there will still be millions of Americans hitting the roads this weekend. U.S. Average Gasoline and Diesel Prices Continue Upward Surge During the past two weeks, the national average diesel price has surged, shooting up by 34.8 cents. For the most recent week, the national average price jumped to 449.7 cents per gallon, 16.6 cents over last week and 169.4 cents above the price a year ago. The average price on the East Coast increased by 16.7 cents to 454.4 cents per gallon, 174.6 cents higher than a year ago. In the Central Atlantic portion of the East Coast, the price went up by 16.6 cents to 468.2 cents per gallon. In the Midwest, the price swelled 16.5 cents to reach 446.3 cents per gallon. The average price in the Gulf Coast grew by 17.5 cents to 444.3 cents per gallon, the largest increase of any region. In the Rocky Mountain region, the average price increased by 16.6 cents to 444.2 cents per gallon. On the West Coast, the average price moved up by 15.6 cents to hit 461 cents per gallon. The average price in California gained 19 cents to 473.7 cents per gallon, 178.2 cents higher than a year ago. Propane Inventories Report Robust Build Text from the previous editions of “This Week In Petroleum” is now accessible through a link at the top right-hand corner of this page. |
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