Friday, February 20, 2009

Gas Prices Down for the Week

After weeks of steadily rising, U.S. Gasoline prices appear to have gone down a bit, though its too early to say whether the trend will continue.

The nationwide average price of unleaded regular was $1.938 Friday, down from $1.949 the day before, and $1.961 last Friday, according to the AAA Fuel Gauge Report. A year ago at this time, motorists were paying an average $3.08 per gallon.

Gasoline prices have risen over the last two months as crude oil prices have remained low. Despite attempted rallies in the oil market, the price of crude has fallen to less than $40 a barrel as world economic problems have become more clear.

And the long-ranged outlook for oil prices is lower rather than higher. Bloomberg News reported Thursday that Barclays Capital had cut its forecast for average 2009 Brent crude oil prices to $60 a barrel from $71 a barrel because of the weakening global economic outlook. The bank expects global oil demand to drop 1.25 million barrels a day this year.

Gasoline prices, though low by recent standards, have been rising because refiners have reduced their output in the early part of the year. When gas prices approached $4 last year refiners operated at peak capacity, to produce as much fuel as possible. Recently, refineries have operated at around 80 percent of capacity.

In its weekly report Wednesday, the Energy Information Administration said U.S. refineries operated at 82.3 percent of their capacity last week, a slight increase from the previous week. The EIA also reported inventories of gasoline increased by 1.1 million barrels last week.

The increase was enough to exert a small amount of downward pressure on gasoline prices. Thirteen states - Alaska, Arizona, California, Connecticut, Hawaii, Maine, New Mexico, Nevada, New York, Oregon, Pennsylvania, Washington, and West Virginia – all have average gas prices above $2 a gallon, with Alaska the most expensive, at $2.519 a gallon.

Wyoming offers the cheapest gas in the land again this week, with an average price of $1.722.

Source : (2/20/2009)

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