Fuel Trends
Sept 28-Oct 2 2009 The U.S. average price for regular gasoline declined for the seventh consecutive week. The average slipped five cents to $2.50 per gallon, bringing the cumulative drop for the past seven weeks to almost 15 cents. The national average was $1.13 below a year ago as prices fell throughout the country. The price on the West Coast slipped below $3 for the first time since August 31, falling five cents to $2.98 per gallon. The price in California dropped four cents to $3.10 per gallon.
For the fourth week in a row, the national average price for diesel went down. The price slipped two cents to $2.60 per gallon, $1.36 less than last year. Prices continued to decrease throughout the country. The West Coast price fell four cents to $2.74 per gallon, and in California, the average slipped two cents to $2.81 per gallon.
Wednesday saw a price spike of 7 percent for crude oil, but experts predict that for the next few weeks increases will be negated. In fact, recent changes up or down have been repeatedly countered by market forces bringing it back to around the $70 mark.
Despite some conciliatory movement regarding Iran's nuclear program, this geopolitical condition appears to remain a bullish consideration that is likely to support prices until either sanctions or the level of Iranian cooperation acquire more definition during the coming weeks.
Factors to the downside are that the US market is viewed as oversupplied by at least 10-12 percent when crude and all products are combined, and other regions of the globe appear to be experiencing similar bearish patterns. Although demand strength is apparent within the Asian economies such as China and India, consumption is lagging. At the same time, indications that OPEC exports have been stepped up appreciably during the past month only add to the downward pressure on prices. Meanwhile, reports that Russian production advanced to a record level in excess of 10 million barrels per day last month provide another element suggesting continued bearish pressures through the balance of this year and well into next.
Chris Nobles
Commercial Fueling
NELLA Oil Company
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