Gas prices declining after crude price plunge
February 12, 2018--6:45 a.m.
Energy prices took a nosedive on the stock market last week and gas prices are declining as a result. Georgia gas prices declined 3 cents during the past week.
Sunday's state average of $2.46 is 6 cents higher than a month ago and 28 cents more than this time last year.
According to gasbuddy.com, gas could be found for as low as $2.33 in Rome and Summerville, $2.29 in Calhoun, $2.35 in Cartersville, and $2.32 in Cedartown.
So far, gas prices have averaged the highest for the month of February in four years.
Georgia is 16th among states with the least expensive gas prices in the country.
"Gas prices have the potential to drop 10-15 cents, based on what happened last week," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "However, refinery maintenance season is fast approaching and could spoil this big break for motorists. Every year - from February to April - reduced refinery output and the switch to summer-blend gasoline normally causes gas prices to rise 30-70 cents. Additional drops in oil prices would help soften the impact maintenance season has on prices at the pump. Expect volatility at the pump as these forces collide."
Crude oil plunged to its lowest price of the year, last week, dramatically reducing the cost of producing gasoline. Friday's closing price of $59.20/b is down $6/b from the week before, and the lowest daily settlement since December.
The downturn for energy prices began on Wednesday when the EIA's weekly report revealed significant gains in domestic production and inventories. Domestic oil production surged to 10.25 million barrels per day - a new record for weekly production. This was the first time U.S. output exceeded 10 million barrels a day since 1970.
As crude production roared higher, U.S. crude inventories swelled by 1.9 million barrels. This was the 2nd consecutive week of inventory gains, after declining 11 weeks in a row. At 420.3 million barrels, domestic oil supplies are 0.5 percent higher than a week ago but remain 4 percent lower than this time last year. Regardless, the inventory growth was one of the fundamental reasons for the oil price drop.
Gasoline futures lost significant strength last week, dropping 15 cents to $1.70 on Friday. Since hitting a multi-year high of $1.93 on January 29, futures gasoline dropped a total of 23 cents.