No relief at the pump

By Johnny Jackson


There has been little relief for consumers at the gas pumps this fall. Gasoline prices have remained relatively high, and could rise more in the coming days, according to officials with AAA Auto Club South.

The price of crude oil dropped slightly last week, however, and will keep retail prices from increasing further this week, but the decrease may only be temporary, said Jessica Brady, public relations manager for AAA Auto Club South.

"It looked like the price of crude oil and retail gas would decline," said Brady. "However, this has been a crazy year for gas prices."

Brady said trends in average gas prices have been atypical all year, due, in large part, to an up-and-down year economically. She noted that the price of crude oil dropped by $1.97 over the week, closing at $84.88 a barrel Friday, Nov. 12, on the New York Mercantile Exchange.

However, she continued, the drop in price came after news that China may drop interest rates, while U.S. inventories of crude oil decreased by more than 3 million barrels, which countered earlier forecasts of an increase of 1.5 million barrels.

"We may start to see the price of crude oil react more to basic fundamentals of supply and demand, as opposed to the value of the dollar," Brady said. "Just because the price of crude dropped this week, doesn't mean it will continue to drop, especially after news announcing demand has increased."

Brady acknowledged that consumers may see only a slight decrease in gas prices this week, as crude oil prices will likely increase and force retail gas prices higher.

The prices consumers have come to know over the past several weeks could be this winter's norm, according to the U.S. Energy Information Administration (EIA).

Earlier this month, the EIA published its revised expectations for the average per-barrel price of crude oil in its November Short-Term Energy Outlook.

EIA projected the price of crude oil to average about $83 per barrel this winter, between Oct. 1, 2010, and March 31, 2011 -- a $5.50-per-barrel increase over last winter, and $3 per barrel more than in its Outlook for October.

"That's a global phenomenon," said Neil Gamson, an economist with EIA. "That's in response to a growing economy, and a growing economy world wide, particularly with diesel. If diesel demand increases, it's because economic activity increases."

The nationwide average for diesel was $3.19 per gallon Monday, according to AAA's Daily Fuel Gauge Report. Diesel was 10 cents cheaper the month prior, and 37 cents cheaper a year ago.

The report said the average price of regular unleaded gasoline nationally remained at $2.89 per gallon, which is 6 cents higher than in October, 26 cents higher than a year ago, and near the highest average price point of the year.

Likewise, the AAA report said, consumers in metro Atlanta are seeing prices average $2.78 per gallon for regular unleaded, near the peak averages experienced back in May 2010.