This week in the US, regular grade gasoline prices have increased to an average of US$ 3.29 /gal. however, the price is still lower than three months ago and 14 cents lower than a year ago. In fact, this is the lowest gasoline price for the Thanksgiving holiday season since 2010. It is tradition for the Thanksgiving holiday to be the most heavily travelled time of the year and AAA have estimated that during the period this year, 38 million people will travel more than 50 miles from their home by automobile.
Why prices vary
Across the regions of the US, gasoline prices vary due to many factors including blending, taxes and regional characteristics. West Coast prices usually exceed the US average due to stricter fuel specification sin California and the region’s relative isolation from other domestic markets. The differing prices on the East Coast can be attributed to varying tax levels in each state.
Refineries along the Gulf Coast produce 2.5 times more gasoline than is consumed in the region. Combine this with lower state and regional taxes on gasoline and the over supply results in prices that are more often that not lower than the national average. On November 11th of this year, gas prices on the Gulf Coast dipped below the US$ 3.00 /gal. mark for the first time since February 2011.
The EIA November 2013 Short Term Energy Outlook predicts that the average US retail gasoline price will be US$ 3.24 /gal of regular during the fourth quarter of this year. The report then expects prices to rise by 9 cents /gal. on average in the first quarter of next year.
Why have prices fallen?
In recent months, the lower cost of gasoline has been attributed to lower crude costs. Between 3rd September and 25th November of this year, spot prices for Brent crude have dropped by US$ 4.66 /bbl. WTI crude fell by US$ 14.81 /bbl, over the same time frame, but this has a smaller impact on the global crude price. The lower demand for crude oil due to seasonal maintenance was also a reason why the price of oil dropped.
Adapted from press release by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/27112013/us_thanksgiving_gas_prices/