By Johnny Jackson
Analysts say OPEC's reductions in production may finally be "gaining traction," which OPEC has sought since November. The traction led to a recent price spike.
On Friday, crude oil closed on the New York Mercantile Exchange at $46.47 per barrel, almost $10 more from the week before, at $36.51. It is the highest week-ending closing price so far this year. Oil closed at $46.34 per barrel on Jan. 2; at $40.83 on Jan. 9; and at $36.51 on Jan. 16.
Although crude oil climbed higher, the abundant oil and gasoline supply coupled with weak consumer demand may be gaining traction as well, according to AAA Auto Club South spokesman Gregg Laskoski.
For the first three weeks in January, crude oil prices went down daily while retail gas prices went up. "Most of the time, retail gas prices run parallel to crude oil prices," Laskoski said. "When crude oil goes up, gas goes up."
For the first time since New Year's Day, the national average price of gas decreased, slipping half a cent since last Friday. Average prices decreased by a tenth of a percent in Florida, seven-tenths of a percent in Tennessee, and eight-tenths of a percent in Georgia.
"Logic tells us that retail prices should decline until either supply diminishes or demand strengthens, but the oil industry seems to have ignored logic for most of January," Laskoski added. "There was no logical reason, we could find, that retail prices increased and crude oil prices decreased."
On Monday, the average price for a gallon of regular unleaded gas remained at $1.74, up from $1.55 a month ago. Metro Atlanta gas prices appeared to plateau over the weekend and remain among the highest in the state at $1.75 per gallon.