Gasoline prices were down very slightly versus last week in every section of the U.S. except the West Coast and Rocky Mountain regions, according to data released Monday by the U.S. Energy Information Administration. Nationally, the price of a gallon of gas was down 0.6% in the past week but still up 6% in the past month, outpacing the 3% drop in the price of WTI Crude, and the 2% drop in Brent Crude.
|
Regular |
WTI Crude |
Brent Crude | |
|---|---|---|---|
|
3/4/2013 |
$3.759 |
$92.93 |
$113.87 |
|
Week Ago |
$3.784 |
$92.74 |
$114.55 |
|
Month Ago |
$3.538 |
$96.21 |
$116.06 |
|
Year Ago |
$3.793 |
$106.7 |
$126.68 |
Source: U.S. EIA.
Price moves were varied among U.S. exchange-traded funds/exchange-traded notes that follow U.S. gasoline and crude.
|
Crude ETF |
Change From Week Ago |
|---|---|
|
United States Gasoline (UGA +2.42%) |
(4.77%) |
|
iPath S&P GSCI Crude Oil TR Index ETN (OIL +0.00%) |
(2.72%) |
|
United States Oil (USO +3.45%) |
(2.43%) |
It could get slightly worse for consumers, as the past two years the national price of gasoline peaked sometime in April to early May. Gasoline prices this year are playing out similar to the seasonal trend over the past five years.
Regionally, gas prices vary quite a bit, with California having the highest prices. Week-to-week, gasoline prices were down in all areas except the West Coast and Rocky Mountain regions, in the latest EIA data.
The price of oil is far below its price last year, when the oil markets were worried about Iran. With the price of oil down so much since then, the obvious question is: Why is gas so high now? Here are some factors to consider.
1. Refinery outages: Many refineries do necessary maintenance in the winter months as demand is the lowest. We need to wait till tomorrow for the release of last week's refinery utilization data. For the previous week, ending Feb. 22, the EIA data showed refineries were utilizing slightly more capacity than last year across the U.S at 85.1%. Compared to last year, the biggest difference was on the East Coast, where refiners were utilizing 75% of capacity, compared to last year when they used just 58% of capacity. East Coast refiners typically get Brent crude and have a hard time competing with Midwestern refiners who have access to cheaper WTI crude.
2. Higher crack spreads: Last month, winter crack spreads were hitting recent highs after being low throughout much of the winter. Crack spreads have since come down slightly but are still high compared to last year. A crack spread is the difference between the prices for crude oil and refined products.
3. Rising global demand for petroleum products: While demand for gasoline in the U.S. has been flat, around the world demand is growing. For structural reasons, the price of oil in the U.S. (WTI) is almost $20 cheaper than the international price of oil (Brent). East Coast and Gulf Coast refineries largely rely on imported Brent crude and have had a tough few years competing with inland refiners who use the far cheaper WTI crude.
