We’re 12 weeks into the 2016 Summer Driving Season. Truth be told, the summer driving season will soon be over. Today’s average price for a gallon of regular unleaded gasoline in these United States is $2.135. This price is essentially unchanged from a week ago.
While most of us you are glued to the television or your mobile devices watching the 2016 Rio Games, this is a good time to also take a look at retail gasoline price trends for the past three months beginning with Memorial Day Weekend.
In an earlier post, Memorial Day Weekend 2016: A Good Time to Take A Road Trip, the average price for a gallon of regular gasoline was $2.317. We see in the figure above that the price for regular gasoline peaked at $2.39 and has steadily declined until the last two weeks where the price has been relatively unchanged give or take a cent or two.
A similar comparison is made of West Texas Intermediate (WTI) crude oil, courtesy of NYMEX’s End of Day Commodity Futures Price Quotes:
As shown, crude oil prices for WTI have been more erratic but show a downward trend over the same time period. However, the price for a barrel of crude at the close of Tuesday, August 16, 2016, was $46.81. This reflects a rise of about $7 per barrel in crude oil prices over the last two weeks. One of the reasons for this recent run-up in crude oil prices is provided by OilPrice.com [Ref 1]: Global oil markets have become volatile once more as the Organization of Petroleum Exporting Countries (OPEC) announced on August 8th that they will hold informal talks during the September meeting of the International Energy Forum in Algeria.
OilPrice.com goes on to explain that the initial speculation was based on recent moves by cartel members including Kuwait, Venezuela, and Ecuador to re-impose caps on output to force a rise in prices. Acting on this suspicion, crude prices spiked upwards for both WTI and Brent oil. Analysts do not believe that a cap is likely because there is an increase in demand for crude oil that is being driven by the United States and India.
Average gas prices across 40% of the U.S. are less than $2 per gallon. Even for those areas that have seen some price increases, the average price today is 55 ¢ less than a year ago.
Given the above, we are about two (2) weeks away from Labor Day Weekend and that’s plenty of time to get in a few more road trips.
- Why An OPEC Production Cap is Unlikely, by Global Risk Insights in OilPrice.com, August 16, 2016, http://oilprice.com/Energy/Energy-General/Why-An-OPEC-Production-Cap-is-Unlikely.html