Gas Prices: AAA’s Fuel Gauge Report | November 5, 2012
(WASHINGTON, November 5, 2012) Today’s national average price for a gallon of regular unleaded gasoline is $3.47 — the lowest price in more than 100 days. This price is 17 cents less expensive than one week ago and 34 cents less expensive than one month ago. The national average has been the highest on record each calendar day since late August; however the gap between this year’s price and the previous record has nearly closed. Three weeks ago the national average exceeded the previous record for that day, also set in 2011, by more than 30 cents. Today it is only a nickel. The national average price at the pump has now fallen for 24 consecutive days, the longest streak since prices earlier this year dropped 26 days in a row from May 15 through June 11.
The only lines longer than those expected at polling locations for tomorrow’s presidential election may be those seen during the last week at some gas stations in New York and New Jersey. Power outages and distribution issues in the wake of Hurricane Sandy left some delivery terminals and service stations — particularly in Northern New Jersey and New York City — without electricity and thus unable to deliver gasoline to stations and consumers. It is important for motorists to realize that this continues to be an issue of electrical supply rather than a gasoline shortage. Once power is restored, there is more than adequate gasoline supply ready to be delivered to consumers.
The U.S. Department of Energy reported this morning that 11 of the 57 terminals affected by Hurricane Sandy remain closed. On Friday, AAA estimated the number of stations operating in both New Jersey and New York City at 45-50% and Long Island at 35-40%. As of this afternoon, AAA estimates that each of these numbers has improved: New Jersey – 55-60%, New York City – 60-65%, and Long Island – 50-55%.
The result of this truncated delivery system has been the sometimes long lines at those stations with power to run pumps and sell gasoline. As power is restored in the coming days, these lines and distribution issues are expected to continue to diminish, and prices will be expected to move lower.
Since last Monday, the price at the pump has increased by three cents in New York and nearly seven cents in New Jersey. During the same period, prices have fallen in every other state and Washington, D.C., led by declines on the West Coast: Calif. -18.5 cents, Wash. -13.6 cents, and Ore. -13 cents. The price in every state, including New York and New Jersey, is lower today than it was one month ago. During that time, the price has fallen by more than 40 cents in 11 states and by more than a quarter in 32 total states.
While prices in some storm affected areas have increased temporarily, ultimately the price impact of Hurricane Sandy will be due to demand destruction rather than supply destruction and pump prices will continue to decline. When demand numbers are announced later this week, AAA expects that, in the days following the storm, American’s will have consumed one to two million barrels per day less of gasoline than in the days prior to the hurricane. This demand destruction will add to the recent downward pressure on gasoline prices from already low demand, continued economic concerns, and the switch to less expensive, winter-blend gasoline. AAA continues to predict that the national average 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 doward 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 ended last week below $85 per barrel for the first time since July 10. At the close of today’s formal trading on the NYMEX, WTI crude oil had risen back above this threshhold, settling down 79 cents on the day at $85.65 per barrel.