AAA FUEL GAUGE: Less than a penny drop in West Virginia gasoline prices

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AAA FUEL GAUGE: Less than a penny drop in West Virginia gasoline prices

Whether the Groundhog sees his shadow or not, he definitely will find West Virginia gas prices have dropped less than a penny a gallon this week. The average price for a gallon of self-serve, regular unleaded gasoline is now $3.139 at the pump.

According to AAA’s Fuel Gauge, crude oil prices were up $2.85 today, settling at $92.19 at the close of formal trading on the NYMEX.  This marks a $4.94 rise in prices from this time last week, and its highest settlement price since October 3, 2008.

The beginning of last week saw the price of crude oil at a 2011 low and had market analysts proclaiming an “end to the winter rally,” suggesting that a further decline in prices might be in the cards.  This prediction held true for much of the week as crude prices continued their decline to a settlement price of $85.64 on Thursday.  Friday began with an uptick in crude prices following a report that U.S. GDP grew at a robust 3.2% last quarter.  This was seen as a positive sign for oil demand and crude prices moved higher as expected.  These gains in crude more than doubled following market-shaking reports of escalating political struggle in Egypt, followed shortly by video of riots in the streets of the nation’s capital of Cairo, as protesters demanded the resignation of President Hosni Mubarak.

While Egypt isn’t one of the world’s largest oil producers, it is a key point of transit for global oil supply as home to both the Suez Canal and the Suez-Mediterranean (Sumed) pipeline.  The Suez Canal links the Red Sea with the Mediterranean Sea and, according to a 2009 estimate, 1.8 million barrels of crude passes through the canal per day, or eight percent of global seaborne trade.  The canal is not large enough to handle large and ultra large tankers and so the Sumed pipeline—jointly owned by Egypt, Saudi Arabia, the United Arab Emirates and Kuwait—carries an additional 1.1 million barrels per day.  Any supply disruption tied to closures of the Suez Canal and/or the Sumed pipeline could have a significant impact on global oil supplies and markets as the alternative path is a 6,000 mile detour around Africa’s Cape of Good Hope.  Additionally, there’s concern that civil unrest could spread to Egypt’s oil-rich neighbors, potentially further destabilizing the region and, subsequently, the global oil market.

Compounding this international concern was the timing of this news on a Friday.  With the weekend looming, and an uncertain few days for Egypt and the global market before the NYMEX would open again for trading on Monday, traders rushed to protect themselves from a possible spike in prices by buying up crude, not wanting to be left out in the cold should the situation further deteriorate.  After near record trading volumes, crude prices surged Friday to settle up $3.70, or 4.3%, at $89.34 per barrel as market watchers prepared for a weekend of instability.

As of today, the current national retail average price for a gallon of self-serve regular gasoline is $3.10.  While prices are down a penny on the week, this marks a 43-cent increase in the price at the pump from this day a year ago.

This week’s average prices: West Virginia Average                         $3.139

Average price during the week of January 25, 2011                         $3.146

Average price during the week of February 2, 2010                         $2.692

The following is a list of the average price of unleaded self-serve gasoline in various areas:















AAA East Central is a not-for-profit association with 80 local offices in Pennsylvania, West Virginia, Ohio, New York and Kentucky servicing 2.5 million members.

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