The government shutdown and fears of a new recession are among a host of factors helping to depress gasoline prices in the area and nationwide, a petroleum analyst with a fuel price tracking website said.
Average retail gasoline prices in Ohio have fallen 13.3 cents per gallon in the past week, averaging $3.32 per gallon Tuesday, according to GasBuddy's daily survey of 5,345 gas outlets in Ohio. This compares with the national average that has fallen 5.8 cents per gallon in the last week to $3.43 per gallon.
Including the change in gas prices in Ohio during the past week, prices were 39.2 cents per gallon lower than the same day one year ago and are 32.1 cents per gallon lower than a month ago. The national average has decreased 18.8 cents per gallon during the last month and stands 36.6 cents per gallon lower than this day one year ago.
"Gasoline prices continue to erode with twelve states that are seeing prices under $3/gallon, and more states will join in on that over the next seven days" said GasBuddy.com Senior Petroleum Analyst Patrick DeHaan. "While it's generally good news that gasoline prices continue falling, many Americans don't believe we're likely to see national averages drop under $3/gal over the next year at the pump," DeHaan said. GasBuddy surveyed over 10,000 motorists with two-thirds of respondents saying that the national average will remain between $3 and $4 per gallon through 2014. Perhaps in a sign of positive sentiment, just 13% of respondents said they thought that prices nationally would exceed $4/gallon, while 20% believed prices could go under $3/gallon.
Chances are, the prices will get lower still.
That’s largely because of the hyper-competitive nature of gas stations in the Great Lakes region, analysts say, with fierce competition that causes price swings that shoot both below the national average and above, with price hikes happening when stations seek to make up for lower prices earlier in the year.
A tame hurricane season, prospects of a peaceful resolution of conflict over Syria, and a seasonal decline in the price of oil are also helping push prices lower when the refiners switched over to the winter blend in mid-September, DeHaan said. The departure of speculative hedge fund money from oil investments and the prospect of an economic slowdown in the wake of government dysfunction has also helped drive prices low, DeHaan said.
The winter blend costs about 10 to 15 cents less to produce than the summer blend because it is not required to meet stricter clean air regulations, analysts say.
“The longer the (federal) shutdown, the more downward pressure will be put on gas prices,” he said. “A longer shutdown will have a more negative impact on the economy as a whole as it pulls gas prices and the stock markets down. If the economy goes into a recession, gas prices will go down significantly.”
DeHaan said the shutdown has had very little impact on the current downward price of a gallon of gas which may drop another five to 10 cents a gallon. “It’s not a big factor now but maybe in a week or so, depending on what happens,” he said.
With the end of the summer driving season, consumers typically see the lowest prices of the year between September and December, said Kimberly Schwind, spokeswoman for the AAA Club that includes Butler County.
Schwind said the government shutdown could affect oil and gas prices because they are commodities. She said gas prices could be affected if there are refinery problems, severe weather issues and the possibility of military action in the Middle East.
As gas prices shift downward, Schwind also said there were a lot of unknown factors to predict what gas prices may be in the future.
The national average price for a gallon of regular unleaded is $3.39, which is seven cents cheaper than last week and 20 cents cheaper than last month. Today’s price represents a year over year discount of 39 cents from 2012.
Barring a hurricane or other unexpected disruption to gasoline production and distribution, AAA expects that retail prices will continue lower in the coming months, as sufficient supplies, flat demand and cheaper winter-blend gasoline mean motorists are likely to pay less to fill their tank.
The most expensive gasoline in the nation can be found in Hawaii ($4.25) and the highest in the continental U.S. is in California ($3.91). The lowest pump price in the nation is in South Carolina ($3.10). While this is the only state currently at or below $3.10 per gallon, AAA anticipates that several more states will fall below this threshold in the coming days and weeks.
News that President Obama had spoken by phone to Iranian President Hassan Rouhani – the first direct talks between the US and Iran in more than 30 years – added an unanticipated calming effect on markets as analysts try to determine whether this action will help to alleviate geo-political tensions in the Middle East.
West Texas Intermediate (WTI) dropped to a three-month low Monday as futures trading was light in response to Congressional gridlock. At the close of formal trading on the NYMEX, WTI dropped 54 cents before closing at $102.33 per barrel. The crude commodity benchmark had not closed this low since July 3.
The following is a list of the average price of unleaded self-serve gasoline in various areas:
$3.403 - Alliance
$3.379 - Ashland
$3.462 - Ashtabula
$3.371 - Aurora
$3.392 - Chesterland
$3.327 - Cleveland
$3.345 - Elyria
$3.374 - Independence
$3.336 - Lorain
$3.356 - Lyndhurst
$3.244 - Massillon
$3.345 - Mentor
$3.281 - New Philadelphia
$3.330 - Niles
$3.294 - Norwalk
$3.332 - Oberlin
$3.273 - Parma
$3.367 - Solon
$3.295 - Willard
By Steve Bennish and Ed Richter - Hamilton JournalNews, Ohio (MCT)
©2013 the Hamilton JournalNews (Hamilton, Ohio)
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