Peninsula Daily News news sources
Like a fickle summer wind, gasoline prices are once again toying with the hearts and minds — and wallets — of North Olympic Peninsula (WA) residents.
Average gas prices on Saturday were hovering in Jefferson and Clallam counties between $2.53 and $2.59 for a gallon of regular in most areas and about $2.56 to $2.60 for diesel.
The average pump price on the Peninsula was $2.12 as recently as the end of March.
Just a week ago, drivers paid 10 to 17 cents less for a gallon of gas.
Gas prices are echoing a rally in the stock market for crude oil, gasoline’s main ingredient.
Since the end of April, oil has gone up 15 percent.
It may not be anything like last year’s runaway bull market for crude, when prices hit a historic peak above $145 per barrel in July and gas prices soared to more than $4 a gallon.
But it’s still enough to push gasoline prices higher, especially with refiners cutting back on production to match lessening demand.
But there may be good news on the horizon — oil prices are going down again.
Oil recently rose above $60 a barrel on optimism that the worst of the U.S. recession was over, but dismal news last week on retail sales, unemployment and housing have traders reconsidering their outlook.
European data was likewise bleak as it showed the euro-zone economy shrank by a massive 2.5 percent in the first quarter, with export-dependent Germany, the region’s biggest economy, particularly badly hit.
“Some of the green shoots are looking like yellow weeds,” said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore.
“That’s going to spill over into equity markets and have an effect on crude.”
He projected that prices would fall back to $50 a barrel soon, which should mean lower pump prices.
Benchmark crude for June delivery dropped $2.28 last week to settle at $56.34 a barrel on the New York Mercantile Exchange.
In London, Brent prices lost 71 cents to settle at $55.98 a barrel on the ICE Futures exchange.
The International Energy Agency, the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries all lowered crude demand expectations.
A number of oil analysts believe that the only thing propping up energy prices this year is the re-entry into the market of hedge funds and other large investors who see crude as a hedge against inflation.
Many traders on Nymex do not believe there are fundamentals in place to support prices this high.
Investors got more evidence Thursday that global crude demand may be too weak to justify the recent run-up in prices.
The Paris-based International Energy Agency cut its global oil consumption forecast for a ninth consecutive month and now expects demand to fall 3 percent in 2009.
The U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries also cut demand expectations.
Meanwhile, the U.S. Labor Department reported that new jobless claims rose to a seasonally adjusted 637,000 — above analysts’ expectations of 610,000 — while continuing jobless claims jumped to 6.56 million from 6.36 million, likewise higher than analysts expected
Washington state last week had the highest price in the lower 48 states for a gallon of regular, which averaged $2.47, according to AAA.
However, gasoline is still more than 35 percent cheaper than it was a year ago, the AAA said.
The lowest price last week was reported in Arizona at $1.98.
The national average was $2.29 — 23.9 cents a gallon more expensive than last month, but $1.486 cheaper than last year.
A forecast by AAA showed that more Americans are expected to travel on Memorial Day than last year.
Gasoline prices almost always rise in spring, as warm weather lures Americans onto the road for weekend and vacation trips, driving up the demand for fuel.
But few are predicting a healthy summer travel season this year.
