Gas Prices: AAA’s Fuel Gauge Report | September 4, 2012
(WASHINGTON, September 4, 2012) Today’s national average price for a gallon of regular self-serve gasoline is $3.82. This price is six cents more expensive than one week ago, 21 cents more expensive than one month ago and 16 cents more expensive than this day in 2011. For more than two straight weeks, the national average price has now set a new all-time record for each calendar day. However, after increasing for 54 of 60 days following the July 2 summertime low of $3.33, the national average has now declined for four consecutive days. Eight states including Calif., Conn., Hawaii, Ill., Mich., N.Y., Ore. and Wash. are now paying an average of more than $4.00 for a gallon of gasoline.
AAA continues to expect that the national average price at the pump will decline heading toward the end of the year. Prices should drop as demand decreases with the end of the summer driving season, as refineries switch to less expensive winter-blend gasoline and as hurricane season ends in October. However, regional supply and distribution issues, hurricane concerns, or other unforeseen market moving events could potentially send prices higher temporarily in the coming months.
National gas prices increased as the Gulf Coast braced for Hurricane Isaac with wholesale gasoline prices spiking dramatically to begin last week. By the end of the day last Monday, refineries totaling more than one million barrels per day of production capacity (8-10 percent of total U.S. capacity) had announced planned closures in preparation for the storm and wholesale gasoline prices in regions supplied by these facilities had surged higher. Wholesale prices were flat on Tuesday as Isaac officially reached hurricane status and neared landfall, but those prices weakened once the market determined that the storm would have a limited impact on long-term production.
The shortened holiday trading week began today with West Texas Intermediate (WTI) crude oil dropping $1.17 to settle at $92.25 on the NYMEX. These losses came after a Friday rally on reports that Chairman Bernanke had not ruled out additional quantitative easing to support the economy. Traders today were responding to a number of reports that indicate that U.S. manufacturing had shrunk and that this could mean that the U.S. economy might be contracting. A weakening economy would be expected to demand less crude oil, which puts downward pressure on prices. The major financial indices mirrored this weakness as the Dow, NASDAQ, and S&P were all down to begin the day. However, the NASDAQ and S&P had both climbed back to post slight gains at press time. Analysts are also pointing to the restart of refining operations along the beleaguered Gulf Coast in the aftermath of Hurricane Isaac as a factor in the sluggishness of WTI prices.