Prices at the Gas Pump Hit a Four-Year Low
Just ahead of the holiday season, the average price for regular gas at pumps within the United States hit the lowest level recorded since November 5, 2010. According to a survey conducted by Lundberg Survey, Inc., in the two weeks ended November 21, gas prices dropped $0.10 cents to $2.8416 per gallon.
Current prices put the price $0.41 lower than the same time last year. The survey conducted by the California-based company relied on information collected from roughly 2,500 gas stations.
The price of gas has dropped due to a slump in oil in a bear market with US drillers producing the most crude in over 30 years. As stated by Trilby Lundberg, president of Lundberg Survey, it is lower oil prices that are the primary incentive. At this time, oil supply continues to be incredibly good.
Among the markets surveyed was San Francisco California where gas prices were at $3.14 per gallon, the highest price in the lower 48 states. Of all states surveyed, Albuquerque New Mexico came in at just $2.47 a gallon on average. For Los Angeles, the average price paid at the pumps for gas was $3.07 and in Long Island New York, $3.12.
The US benchmark priced in Cushing Oklahoma, which is West Texas Intermediate crude, dropped 2.7% or $2.14 to $76.51 per barrel on the New York Mercantile Exchange, this in the two weeks ended November 21. On November 13, it settled at its lowest level since 2010 at $74.21 a barrel.
Since peaking on June 20 of this year, prices have fallen 29%. For US output, this declined to nine million barrels a day, week ended November 14, after the previous weeks number of 9.06 million which was the highest level in data from the weekly Energy Information Administration going back to 1983.
Increasing was US production, up 62% over the past five years, this as various hydraulic fracturing and horizontal drilling were used by companies to tap into hydrocarbon-rick layers of shale rock beneath the surface.
A meeting is scheduled for November 27 in Vienna for members of the Organization of Petroleum Exporting Countries. When surveyed by Bloomberg, 20 analysts were split 50/50 as to whether production will be cut in order to bolster prices or take no action at all by the group.
In a statement from Lundberg, there are no more rumblings about specific members wanting to see a cut in output but there is also no indication that this will not happen.
For the week ended November 14, 15.9 million barrels of oil were produced a day by refineries, a seasonal record beating numbers reported in 1989 in Energy Information Administration records.
Stockpiles of gas grew 1.03 million barrels or 0.5% to 204.6 million within a seven day period week ended November 14. For the two weeks ended November 21, gas futures on the Nymex dropped $0.8 or 3.7% to $2.0565 per gallon.
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