Threat of Tropical Storm Karen Has Potential To Impact Oil Operations, As Some Refineries Close Early As Storm Nears
Gas prices continue their downward trend. The national average has declined for 33 days in a row (through Friday), which is the longest consecutive decline since April 2012. Gas prices averaged $3.52 per gallon in September, the lowest national monthly average for the month since 2010. Friday’s national average price for regular unleaded gasoline dropped to $3.37 per gallon, down five cents from a week ago, down 22 cents from month ago prices and 41 cents less than a year ago.
The price of crude oil dropped to $102.33 per barrel Monday, the eve of the government shutdown, and declined a few pennies further on Tuesday, the first day of the shutdown to $102.04, reflecting the lowest settlement since July 3. The commodity rebounded to $104.10 on Wednesday based on favorable news regarding the completion of the Keystone pipeline. The positive news was short-lived as the commodity fell to $103.31 per barrel at Thursday’s close. As of early afternoon Friday, the price of crude oil was trending higher over concerns of Tropical Storm Karen’s potential threat on oil production in the Gulf of Mexico.
In its weekly report, the Energy Information Administration (EIA) data showed crude oil stocks grew by 5.5 million barrels to 363.7 million barrels, which is not unusual given decreasing refinery runs and seasonal maintenance work on the horizon. Gasoline stocks grew by 3.5 million barrels to 219.7 million barrels, which is well above last year's sub-200-million-barrel mark at the end of September. Demand for gasoline declined significantly, dropping 319,000 barrels per day (bpd) to just 8.527 million bpd, about a 100,000 bpd shy of the same week in 2012 and the lowest level since May of this year.
“Most drivers continue to pay lower prices each consecutive day with the trend expected to continue through the remainder of the year thanks to abundant gasoline supplies, the end of the summer driving season, lower oil costs and the switchover to winter-blend gasoline,” said Ragina C. Averella, Manager for Public and Government Affairs for AAA Mid-Atlantic.
The Week Ahead
Forecasters are monitoring Tropical Storm Karen as it continues its path toward the Gulf coast, pounding the region with heavy rains and wind. The storm is expected to hit landfall late Saturday or Sunday morning and the potential still exists for Karen to escalate to hurricane status. Some energy companies have already halted oil production and evacuated personnel as a precaution. With the Gulf of Mexico accounting for approximately one fifth of U.S. daily oil production, there is the potential that any disruption could result in a slight uptick in crude prices in the short term.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
(at Thursday’s close, 10/3/13)
per barrel (Thursday, 9/26/13)
per barrel (9/3/13)
per barrel (10/3/12)
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AAA has a variety of resources to help motorists save on fuel:
· Fuel Price Finder (AAA.com/fuelfinder) locates the lowest fuel price in your area.
· Fuel Cost Calculator (FuelCostCalculator.AAA.com) helps budget travel expenses.
· TripTik Mobile (AAA.com/mobile) plots fuel prices along your travel route.
· AAA's Member Rewards Visa® Credit Card (AAA.com/financial/AAAvisa.htm) accumulates double points on fuel purchases.
Next Weekend Gas Watch: Friday, October 11, 2013
AAA Mid-Atlantic is based in Wilmington, Del., and serves nearly four million members in Maryland, the District of Columbia, Virginia, Delaware, Pennsylvania and New Jersey with personal insurance, financial, automotive and travel services through 53 retail branches, regional operations centers and the Internet, at www.AAA.com.
Ragina C. Averella
Phone: (410) 616-1900 ext. 61152 Pager: (443) 465-5020
Contact: Christine Sarames Delise
Phone: (410) 616-1900 ext. 61153 Pager: (443) 244-7253