Gas Prices: AAA’s Fuel Gauge Report | November 12, 2012
(WASHINGTON, November 12, 2012) Today’s national average price for a gallon of regular unleaded gasoline is $3.44. This price is three cents less expensive than one week ago and 36 cents less expensive than one month ago. For nearly three months the national average has been the highest on record each calendar day, however that gap has almost disappeared. One month ago the national average exceeded the previous record for that day, also set in 2011, by more than 30 cents. Today it is less than a penny and may fall below last year’s price before the end of the week.
The national average reached a recent peak of $3.87 per gallon on September 14, the day before the many parts of the country made the seasonal switch from summer- to winter-blend gasoline. Since that peak, the price has fallen 43 cents, including 31 of the past 32 days as lower crude oil prices, reduced demand, and economic growth concerns have pressured pump prices lower. Every state and Washington, D.C. has a price today that is lower than mid-September, and in many cases the price is much lower. However, nine states (Ill., Ind., Kent., Mich., Minn., New Jersey, New York, Ohio, and Wisc.) have seen prices rise in the last week.
In the immediate aftermath of Hurricane Sandy, power outages in New York and New Jersey left many stations unable to operate pumps, despite gasoline in their storage tanks. Long lines developed quickly in many areas with only a limited number of open stations. Even as power was restored to some stations, others with electricity ran out of fuel to sell because of distribution issues from closed petroleum terminals and infrastructure damage. While stations have continued to reopen as electricity has been restored to many impacted regions, long lines have persisted as distribution and resupply issues are slowly resolved.
On Nov. 2, AAA estimated that 45-50 percent of stations in New Jersey and 40-45 percent of stations in New York City were in operation – meaning they had conducted at least one fuel transaction that day. As of today, AAA estimates this number has improved to 70-75 percent of stations in New York City and 80-85 percent in New Jersey.
Looking up the supply chain, to the closed terminals that are currently the primary factor in distribution issues, on November 1 the Department of Energy reported that 13 of 57 terminals in the path of the storm were closed, as of today the Agency reports that seven remain shut. The issues in restoring these terminals to normal operation is the primary reason motorists have continued to experience lines at gas stations in some areas, and has led to continued gasoline rationing in New York City and Long Island. New Jersey announced today that it is ending gasoline rationing beginning at 6:00 AM tomorrow morning.
This continues to be a distribution problem and not a systemic issue with gasoline supplies. As petroleum terminals return to service, there is plenty of gasoline ready to make its way to stations. Once this is able to happen, AAA expects pump prices in affected areas to follow the rest of the country lower. AAA predicts that the national average price will be $3.25-3.40 by Thanksgiving and $3.10-3.30 by the end of the year.
Lower crude oil prices have added to the recent downward pressure on retail gasoline prices. With continued signs of global economic weakness and a somewhat stronger U.S. dollar, West Texas Intermediate (WTI) crude oil prices have continued to move lower. At the close of today’s formal trading on the NYMEX, WTI crude oil was down 50 cents on the day to settle at $85.57 per barrel.