- 22 Dec
Fuel Price Pattern Reverses In 2010, Rising $.30 Since Labor Day
Fuel prices trend downward from Labor Day to December. Or so has been the consistant pattern according to the US Energy Information Administration who has tracked retail fuel prices since 1990.
But in 2010, fuel prices reversed this pattern, rising $.30/gallon from Labor Day to mid-December. As a comparison, over the 2004 through 2007 period and in 2009 (2008 is excluded due to the rapid run-up and subsequent crash in crude oil prices over the course of that year), the national average price for a gallon of regular gasoline fell an average of 22 cents between Labor Day and the middle of December.
The $2.98 per gallon national average price of regular gasoline on December 22, 2010 is the second highest on US EIA record for the third week of December, surpassed only by 2007 when the average price reached $3.00 per gallon.
The US EIA explains this unusual phenomenon on several factors:
- Strengthening demand combined with a tightening U.S. supply picture (particularly on the East Coast)
- In October and November, a planned outage at Irving Oil’s St. John refinery in Canada, a major supplier of gasoline to the United States, coupled with port and refinery strikes in France, limited the amount of gasoline available for import.
- In late August, gasoline inventories on the East Coast were in excess of their five-year average by over 11 million barrels; however, by the end of November, that excess inventory had been completely eroded, with inventory levels almost 3 million barrels under the five-year average.
- Crude oil prices have continued to rise as the market has become more confident that strong global oil demand growth will continue into 2011.