The average price of a gallon of gasoline is down approximately 22 cents from last year, according to the U.S. Energy Information Agency (or EIA) weekly report on gasoline prices, released Monday. Prices declined again for the nation last week, bringing the average cost to $3.265 per gallon.
Regions that fared better than the national average last week included the Midwest ($3.18 per gallon), Gulf Coast ($3.03 per gallon), and Lower Atlantic ($3.21 per gallon). West Coast residents paid the most on average at $3.56 per gallon. That is, unless California’s $3.66 per gallon costs are taken out of the equation, then New England becomes the priciest region at $3.43 per gallon.
What is behind the drop in prices and extra change in the pockets of fuel-dependent Americans? Anthony Grisanti, a trader with GRZ Energy, told NBC in late October falling gasoline prices were because of ”fourth-quarter demand. There’s always less demand for gasoline at the end of the year and that’s what you’re seeing. Plus there’s plenty of supply of gasoline — and oil.” GRZ Energy provides trading advice on energy futures.
“Plenty” may be a bit of an understatement. Also in late October, CNBC reported on the large supply of gasoline in the U.S. A release by the EIA showing greater-than-expected levels of oil in the U.S. drove down the price to below $97 per barrel in the U.S. Per barrel price had not been that low since July.
It is a result that could be repeated. The EIA is expected to release more information on U.S. oil supplies tomorrow. Ten analysts surveyed by Bloomberg expect the findings to say there was a 2.15 million barrel increase in the crude oil supply last week. Futures Division Director, Bob Yawger, of Mizuho Securities USA Inc., told the media outlet that, “The supply situation is overwhelming everything else.”
It is also bringing down the prices of West Texas Intermediate (NYSEARCA:USO). December delivery prices for WTI dropped by as much as 75 percent, a loss of 71 cents, bringing the price to $93.91 a barrel. This is below the most recent short-term projections by the EIA. In early October, before the market was fully aware of the amount of oil the U.S. holds, the EIA projected prices of $101 per barrel for WTI in the fourth-quarter of 2013, and $96 per barrel in 2014. The next report on short-term projections is scheduled for November 13.
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