Skip to comments.Some relief appearing at the pump
Posted on 08/19/2006 6:59:30 AM PDT by thackney
Is it for real? Are gasoline prices, after hovering just below $2.90 a gallon for weeks, actually on their way down?
If Tom Kloza's right, they are.
According to AAA, prices dropped across the state an average of 6 cents this week 7 cents in Houston to $2.86 prompting the analyst with the Oil Price Information Service to predict prices will drop more.
If there aren't any tropical storms or crude oil prices don't bounce back up, "we're on a collision course for somewhere in the next 30 days when we're going to say, 'My goodness, those are cheaper than they were a year ago,' " Kloza said.
The all-time average high price nationwide was $3.06 on Sept. 5 last year after Hurricane Katrina raked across the Gulf of Mexico's offshore oil fields.
"Right now, if things don't change, we're going to be in the $2.75-$2.90 range" this year at that time, Kloza said.
After the 7-cent weekly decline was reported Thursday, prices continued to trend downward in Houston on Friday, with the average pump price dropping another penny to $2.85, AAA's Gasoline Survey reported.
But if you looked hard enough, you could find it much cheaper than that.
In fact, two stations at the corner of Crosstimbers and Yale, just north of Loop 610, were in a fierce price war on Friday for at least the second day. A Valero station on the south side of the intersection was offering regular unleaded for $2.57 a gallon, while a Conoco station across the street was selling it for $2.54 a gallon.
Welcome relief For 61-year-old Ollie Banks, a retired municipal worker from North Houston filling his 2003 Buick at the Conoco station, the relatively low prices were a welcome relief.
"It might cost me $5 to get over here since I live off U.S. 59, but it's worth a shot," said Banks, who filled up his car's tank and then a 1-gallon can.
Relatives who live around the corner from the two stations told him about the price war.
"They need to come on down a little bit lower it wouldn't hurt none," said Banks, who was fortunate enough to get to the station before customers ran the low grade's tank dry.
Kloza said the reason prices are falling is that, along with calm weather, the summer driving season is winding down. That should further push down prices.
Meanwhile, the planned terrorist attack on jetliners foiled by the British this month affected the demand, rather than the supply of oil, because jets use a lot of fuel, Kloza said. He also pointed out that gasoline prices had not significantly jumped after production was cut at Alaska's Prudhoe Bay.
On Friday, however, gasoline futures prices reversed direction, gaining 3.53 cents to close at $1.9669 a gallon, on speculation that the U.S. economy is still strong enough to keep demand from falling.
Crude oil rose, closing up $1.08 to $71.14 a barrel. Heating oil futures rose 2.45 cents to $1.9895 a gallon, while natural gas futures edged up 4.2 cents to $6.731 per million BTUs.
Supply is healthy AAA spokeswoman Rose Rougeau credited a healthy fuel supply for sending prices lower.
But regardless of the reasons behind the decrease in retail prices, it's helping people like Ben McMillian, a 33-year-old child counselor from Houston who bought gasoline at the Valero station Friday.
"I got to the point now where I go where I need to go and come back home. It's too high," McMillian said. "I still go where I need to go, but I've got to watch my money and economize."
GasBuddy.com can help you find cheap gas prices in your city. It is a network of more than 173+ gas price information web sites that helps you find low gasoline prices.
Careful. Someone is going to sneeze and the price of crude will go up!!!!
I hope you drove on past them.
This will be reported nowhere in the MSM. They need to keep repeating "record high gas prices" for the next 90 days.
lets just hope Ahmanutjob in Iran doesn't get frisky on the 22nd like all the "we're doomed" crowd has been saying.
... if the sun doesn't rise in the east and the lark doesn't take to the wing and Cynthia McKinney is voted Miss Congeniality at the next KKK rally and President Ahmandinejad gets circumsized ...
... somewhere in the next 30 days when we're going to say, 'My goodness, those are cheaper than they were a year ago,'
"Somewhere in the next 30 days, either we're going to have to make up a whole raft of new excuses, or people are going to say 'My goodness, gas is cheaper than it was before it tripled in price!' This is known as incrementalism -- two steps forward and one step back. We learned it from the communists."
I think crude is going to take a dive. The current price is unjustified and completely driven by various funds speculating in crude. That bubble is about to burst. They all think its going to 100 dollars a barrel and that is their mistake. Just like in 1980 when all the gold speculators thought gold was going to 1000 dollars. They pick a target and it becomes conventional wisdom but there is no justification for it to go there.
At $75, the oil company makes $25 profit. If oil drops to $50 it will be hard for some to even stay in business.
Where did you get that number? Not too long ago crude was under 40 dollars a barrel. The price to get it out of the ground has not gone up. Recently ExxonMobil made more money than any company in history for that reason.
The number was mentioned by an oil exec last week. It pertains to Prudhoe Bay, which is admittedly not cheap oil.
Wait is this about gasoline, or the Judge in OK?
(No more Olmert! No more Kadima! No more Oslo!)
Yeah but he gets paid to say that. Actually there was a great article on Bloomberg about this a few days ago, I'll try to find it. No way that crude costs 50 dollars a barrel, it would never have been feasible to produce it until very recently.
hard to stay in business at 50 dollars a barrel?
I wonder how they all survived during that period of really cheap gas.
Once in a while an oil spokesman will let a number slip out into public and then we have to try to guess what went into the number. If Prudhoe oil costs $40 a barrel they might be adding in new exploration costs, new wells. They have some severe constraints for putting down a new drill pad, for example.
It's a mystery. Something is going on and we will have to sit quietly and wait for further sightings so we don't spook the game.
Thats definitly true. ExxonMobil however has spent billions buying back their own stock instead of putting all this windfall cash into exploration or infrastructure.
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