Today is the last day of Spring, and while we will pay on average about 40cts gal more for each gallon of gasoline than the first day of the season, we have dipped back below $3.00 gal as a country. Today’s national average compiled by OPIS for AAA is $2.998 gal, down about 23cts gal from the May 24 all time peak, but up about 12cts gal from last year.
As I’ve indicated in this column recently, there is an uneven course ahead of us. The adjective that equity and commodities’ analysts like to use is “congestive”. I prefer fidgety, but in any case, we’ll see mostly inconsistent prices in the next 30 days, with a bias toward lower numbers, but occasional paroxysms that break the ennui.
For the most part, the discriminating motorist can find gasoline for less than $3.00 gal in more than 80 percent of U.S. states. You won’t find it in Hawaii, but you will find it in California, even though the average prices there are closer to $3.25 gal. The cheapest gasoline in the country is in South Carolina where folks heading to Myrtle Beach, Charlestown, or Hilton Head can find fuel in the $2.60’s if they keep their eyes open.
For details of states and metropolitan areas, visit the AAA website at www.fuelgaugereport.com
Numbers & More Numbers
The first time this country hit $3.00 gal as an average was on September 3, 2005 after Hurricane Katrina knocked out much of Gulf Coast refinery production. But for all the calamitous damage that the tempest rendered, we spent only eight days above $3.00 gal in all of 2006.
Last year, we surpassed $3.00 gal on July 27 and stayed there for just nineteen days.
This year, we first hit $3.00 gal on May 4, so this morning’s $2.998 gal number breaks a string of 47 days. We’ll spend more time at high altitude only if storm threats are significant or a further refinery event (like the fires that hit Valero’s McKee, Texas refinery or BP’s Whiting, Indiana Plant) develops. Let’s hope for the best on all fronts.
Tomorrow, of course, marks the first day of Summer, enabling yours truly to crow that I was right when I suggested that gasoline prices would calm down after the “petronoia” rally and cool by Summer. I don’t see any laurels to rest upon, however, since the breadth of this year’s Spring rally far exceeded my expectations and projections. Mea culpa.
But representatives of the fourth estate would be wise to take the $4.00 gal-as-a-certainty price hounds to task. Ask them whether they have liquidated their speculative long positions in gasoline futures.
For the record, with one day left to record in our database, Spring retail prices have averaged $2.95 gal in 2007. Tomorrow, I’ll compare that to some previous seasonal averages. But for now, it means that our huddled masses spent about $105-billion on fuel during the period. I’m betting that when my research assistants, colleagues, and other minions check the numbers, it will represent the first season ever where Americans topped $100-billion in gasoline expenses.
Footnote: This morning will see the release of Energy Information Administration (EIA) data and my expectation is that it will show more sluggish gasoline demand. I fully expect that next week’s report will show the healthiest refinery runs of 2007. If neither of these predictions are not supported by the data, it will test the respect I have for the integrity of the information.
Don’t get me wrong. The people who work at EIA are among the most knowledgeable and dedicated people in all of government. Some have spoken at OPIS conferences and have impressed one and all with their grasp and prowess of industry dynamics.
But data surveys are only accurate when the participants honestly share numbers on production, inventories, and imports, and my suspicion is that compliance with EIA requests is a low priority on the task totem for oil companies, and especially for “Wall Street refiners” these days.