With the average price of gas in Indiana down 20 cents over the last week, GasBuddy.com Senior Petroleum Analyst Patrick DeHaan said this is due to a number of factors, including the switch to winter blend gasoline.
“A lot of it has to do with seasonal factors as well, drops in demand that allow the supply to build. That’s really the gist of it, you have falling demand, rising supply, and the switchover to cheaper winter gasoline. That’s essentially it in a nutshell,” said DeHaan.
The statewide gas price average for self-serve regular unleaded gasoline is at $3.58, the lowest it has been since July 31. The national average is $3.74 which is 27 cents higher than it was one year ago today.
The conclusion of the summer driving season and steadily decreasing daylight hours have contributed to an overall decrease in gasoline demand throughout the U.S. during the last several weeks which is normal this time of the year.
Refineries have started to transition away from the summer blend of gasoline which is more expensive to produce than other variations used throughout the rest of the year.
California has the most expensive prices right now at $4.55 while drivers in Missouri can find the cheapest gasoline price at $3.45.
With gas prices up roughly six cents over last week in Indiana, GasBuddy.com Senior Petroleum Analyst Gregg Laskoski attributes the rise in prices to problems in California and overseas. He said there is a lot of problems around the country, but the biggest problems at the moment exist in California.
The state is seeing some significant supply problems because of two refineries that have been out of commission: one refinery lost power, and one suffered from a fire. That, on top of a pipeline problem, has pushed the state of California to record-high prices of $4.59 per gallon. Laskoski explained that Los Angeles has been hit even worse, with prices as high as $4.70 per gallon.
Gas prices are once again on the rise across Indiana, and GasBuddy.com Senior Petroleum Analyst Patrick DeHaan says it’s nothing unexpected. Since midnight yesterday across the state, prices have risen at least $0.02 per gallon as some stations report prices of $3.99 and up. The average price of gas in the Knox area is $3.99 while the average price in La Porte is $4.19 per gallon.
DeHaan explained that gas prices in smaller areas such as Knox, Winamac, Culver, and La Porte are hard to predict, but larger metro areas such as Fort Wayne, South Bend, and Indianapolis are enduring gasoline spikes of several cents per gallon. Fortunately, DeHaan says this is only temporary; as the holidays approach, gas prices tend to decrease.
Gas prices spiked in the area yesterday and Don Good from the Good Oil Company says the incident with BP this week could be part of the cause.
“Every little thing that’s an emotion causes this stuff to spike in the Midwest because we’re kind of vulnerable right now and just the way the supply lays out so I’m sure that had something to do with it.” (don good 08-25 #1)
That wasn’t the only cause of the price hike.
Gas prices in Indiana are once again on the rise, but this time it seems to be only affecting the Great Lakes region. The average price of gas in Indiana has risen to $3.83 per gallon, while the national average is only up slightly at $3.55.
According to GasBuddy.com Senior Petroleum Analyst Patrick DeHaan, this regional increase is due to a number of issues plaguing the Great Lakes oil industry.
Gas prices spiked a bit this week as crude oil prices hit $93 a barrel. Oil prices have surged 17 percent since bottoming out at their recent low of $78.20 on June 21.
The rise in oil prices can be blamed on increasing tensions in Iran. Prices around the area average about $3.55 a gallon. Oil prices have also increased by an easing of the debt crisis in Europe.
Oil prices fell below $92 yesterday due to weak demand.
The oil market is responding to a series of events that have raised concerns that Iran will try to block oil shipments through a narrow waterway in the Persian Gulf – a pathway where the world’s oil travels every day.
Analysts say Middle East tensions could cause further spikes for oil but they might not be long-lasting. The world’s two biggest crude consumers, the U.S. and China, are both struggling with economic slowdowns that are crimping demand for oil.
The good news is supply is in good shape.
If you’ve filled up your gas tank lately, you might have noticed it was a bit less painful than usual. With the average price of gas in Indiana down to $3.40, now might seem like the best time to stock up on gas – but Don Good of the Good Oil Company says prices could very well continue to decrease.
Good explained that prices have lately been driven more by the world and US economies than by supply and demand, which is why gas prices have been dropping this summer rather than rising alongside the temperature. He says that for the last six months, supply has been very good, and when looking at the world forecast for economy and fuel demand, the demand for fuel has been decreased.
At the beginning of May, Indiana’s average dropped to around $3.83, but within two days it spiked back up to $3.93. In the last month, the lowest average price for fuel in the state was $3.79 on April 25.
The national average is on a steady decline as well. On April 5, the average price for gas was roughly $3.92, but over the course of a month, the price has decreased to rest at $3.79. Only twice within the last month has the Indiana average been lower than the national average.
Gas prices are still causing concern, especially with the summer months upon us and vacation plans taking shape. Don Good from the Good Oil Company says after the Memorial Day weekend, prices should be level and not as high.
“Overall the trend is going to be down,” said Good. “There’s a lot of volatility where it bounces up and down so I think you’re going to see it moving at about a ten or fifteen cent range up and down, but the general trend will be down.”
The national average for gas prices is falling slightly, according to GasBuddy.com. At the beginning of April, the national average was around $3.90, but today it has dropped to $3.86. Indiana’s average is only a cent higher at $3.87.
The lowest gas prices currently reported in Indiana are in Martinsville, where regular gas can be found for $3.65. One of the highest prices is in Valparaiso, where regular gas can be found for $4.35 per gallon.
While gas prices may be dropping a bit now, it’s sure to be only a matter of time before they spike again. Remember, to save on fuel mileage, avoid high speeds, don’t accelerate or brake hard, keep those tires inflated, use your air-conditioning sparingly, and keep the windows closed. Be sure to keep your vehicle maintained, use your cruise control where you can, avoid heavy loads that increase weight on the vehicle, avoid long idles, and if you are purchasing a new vehicle, be sure to check the vehicle’s fuel economy.
Frustrated with gasoline prices? Don Good, a gasoline distributor in Winamac Indiana talks about where gas prices are going.
“The general wisdom is that we are going to see it up for a little while longer,” Good replied. “We are, though, approaching the top. There is not only a demand degradation here, but China is starting to slow down also. So it kind of appears that we are approaching the top.”
Anger, suspicion and frustration are only three of the words used to describe the public’s reaction to the gasoline prices.
“Everybody is frustrated with it. An up market just absolutely kills everyone. You just can’t move it to the street fast enough when it moves like this. We’re seeing 10-15 cent jumps a night with no reason,” Good said.
He’s said it before, and he’ll say it again, if we could only get the speculators out of the market we could stabilize these prices.
“Here’s the thing. We’ve been pushing the oversight on the commodities market for several years. We’re trying to get the speculation slowed down. Here’s something to consider: there is at least 56 cents a gallon minimum in speculation.”
Good said don’t be surprised that when the market breaks, prices will go down rapidly.
Congressman Joe Donnelly has sent a letter to President Barack Obama urging him to open the Strategic Petroleum Reserve in order to reduce the price of gasoline. He stated that opening the reserve has proven to reduce gas prices.
Last year, President Obama allowed the release of 30 million barrels of oil from the reserve and that action reduced the gas prices six percent.
After a decrease of almost $.10 in some cases earlier this week, gas prices jumped back up to $3.99 by Wednesday.
Gas prices were $3.99 in Knox and around $3.89 in North Judson yesterday. The average price in Indiana yesterday was $4.00 a gallon while the national average was $3.86.
Gasbuddy.com offers these gas saving tips: Avoid high speeds, do not accelerate or brake hard, keep tires properly inflated, use your air conditioner sparingly, keep windows closed, service your vehicle regularly, use cruise control, avoid long idles and if it’s time for a new vehicle, consider a fuel efficient one.
The Ancilla Board of Trustees recently approved a decision to freeze tuition for the coming fall semester. Ancilla President, Dr. Ron May, was asked if part of the decision had to do with gasoline prices. He said that it was.
“Its a major challenge for our students,” stated Dr. May. “One of the things we have is an emergency fund and occasionally we have our students who need help with gas. Through a mechanism that we have put in place, we sometimes give them gas cards.”
The talk about gasoline prices and what’s driving the market has overshadowed the fact that huge oil finds have been discovered in the United States. According to Don Good, of Good Oil in Winamac, we are able to get to the product with new technology.
Don talked to us recently about the Bakken Shale Oil Field which stretches from Canada into Montana and North Dakota. This field could hold over four billion barrels of oil reserves, and the Arctic Natural Wildlife Refuge in Alaska could potentially hold up to 10 billion barrels of oil. They are looking at oilfield wireline services for the number of things these can do.
Second District U.S. Congressman Joe Donnelly this week commented on the rapidly increasing gasoline prices at the pump, by going after the speculators.
“We are going after the speculators who I think are driving the market up. I have sent a letter this week to go after these speculators. I think what they are doing to the American people is shameful,” Donnelly said.
At least one of the Republican presidential contenders, Newt Gingrich has been campaigning on lower gas prices by saying in campaign speeches that he would bring prices down to the $2.50 a gallon level. Donnelly invited Gingrich to join him in going after the speculators.
“The best thing Newt could do to help everybody is to go after the speculators, and try to get the people who are causing the price increases out of the market,” said Donnelly.
Donnelly and others in congress are attempting to make it harder for the speculators to trade in the futures by forcing the buyer to take actual delivery of the product. Republicans have also called for more U.S. Production.
Both parties agree that oil prices will be unstable until a resolution to the Iranian Nuclear program problem is settled. Iran has threatened to shut down the Strait of Hormuz if attacked, or other sanctions are sought. That would cut off 2.2 million barrels a day to the world markets. The U.S. is banned from receiving oil from Iran.
Don Good from the Good Oil Company in Winamac has said this week that you can forget what you may have read about the laws of supply and demand when it comes to gasoline prices. The supply of oil and gasoline is higher today than it was three years ago when a gallon of gasoline sold for $1.90.
There is a culprit – Wall Street speculators. A decade ago they controlled 30% of the oil futures market. Today they control 80%.
As gasoline prices go up dramatically at the pump, everyone is considering how to absorb the extra cost of driving.
With gasoline consumption down to the 1989 level, it looks like gasoline prices should be going down. According to Don Good from the Good Oil Company in Winamac, the speculators are holding the prices in the higher price range. There’s something else coming soon that will impact prices, too.
