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Gasoline Prices Poised to Climb -- But When?

By Joe Benton
ConsumerAffairs.com

February 2, 2007

• OPEC Unable to Stop Gas Prices' Slide • Give Thanks for Falling Gas Prices • Gas Prices Fall Below $2 a Gallon • Oil and Gas Supplies Rise • Gas Prices Accelerate Their Decline • Gasoline Prices Down 19 Cents in a Week • Charlotte Gas Stations Make Refunds to Consumers • Oil Snaps Back As Markets Sense Post-Election Bounce • Gas Prices Settle Still Lower for Weekend • Gasoline Prices Keep Falling • Gas Below $3 Nationwide • Average Gas Price Down to Nearly $3 a Gallon • Gas Prices Drop, Along With Oil • Gas Prices Head Lower as Economy Slows • Gas Price Declines for 9 Days • Gas Prices Continue Downward Trend • Oil Prices Surge By Record $25 a Barrel • Gas Prices Drop for 5 Days • Price-Gouging Probes Spread to 6 States • Investigations of $5 Gas in North Carolina, Florida, and Virginia • Shortages, Price Hikes Follow Ike in Southeast • States Investigate Gasoline Price Gouging Claims • Pumping More U.S. Oil Won't Lower Prices, Consumer Group Says • Oil Prices Fall, Gas Prices Surge • Gas Prices Slide 8 Percent from Record --- • More ...

Price breaks at the pump seem to be ending as crude oil prices head back up. Our brief flirtation with $2 a gallon gasoline saw prices at their lowest levels in 18 months.

Despite the recent falling prices, big oil companies earned record profits in 2006. Exxon Mobil set the record for the largest annual corporate profit ever of $39.5 billion last year even with a 4 percent decline in fourth-quarter profit due in large part to declining gasoline profits.

Chevron Corp. also announced a drop in fourth-quarter earnings but the second largest U.S. oil company managed to earn $17.1 billion, up 22 percent from 2005 and a new record-high for the oil giant.

The Foundation for Taxpayer and Consumer Rights used those oil industry financial reports as evidence to charge that "last summer motorists were the victims of one of the greatest rip-offs of all time when gasoline prices topped $3 per gallon."

"The proof in Exxon's profit report is that oil companies are robbing Americans blind and that the companies can have tremendous influence over gasoline prices at any time they want simply by taking a little less in profits," said FTCR President Jamie Court.

Gasoline prices could be moving up and away from $2 as early as next week. The current cold snap in the Northeast is driving up the demand for heating oil. There is the threat of production cuts by oil exporting countries along with a major refinery fire in Texas.

January crude prices touched a 2007 high of $60 a barrel then fell to a 20-month low of $49.90 and now are nearing $58. That is bad news for consumers and motorists.

Last week gasoline averaged less than $2 a gallon in five states. This week prices average under $2 in only three states -- South Carolina, Oklahoma, and Missouri.

Across the country, the price of regular self-serve gasoline is averaging $2.16. One month ago regular sold for $2.32 and one year ago $2.36.

Mid-grade gasoline now averages $2.30 and premium $2.38. Diesel is selling for an average price of $2.53.

The least expensive gallon of regular gasoline is on sale in Jackson, Missouri for $1.79. The most expensive gallon is on sale in St. Thomas, Virgin Islands.

Here is a look at some gasoline prices from around the country in the ConsumerAffairs.com Gas Price Round Up.

Texas: Retail gasoline prices continued to fall over most of Texas.

The AAA Texas gas price survey showed that regular self-serve averaged $2.04 per gallon statewide, down 1 cent from last week.

Auto club spokeswoman Rose Rougeau said prices may have bottomed out.

"A new round of OPEC production cuts and forecasts of cold weather in the northeastern part of the U.S., have added pressure to the energy markets and pushed crude oil prices upward," she said. "The effect to motorists could eventually mean higher prices at the gas pumps."

The highest average price in the Texas survey is in Amarillo where regular averaged $2.11 per gallon, up 8 cents from last week. The cheapest remained in Corpus Christi at $1.93 per gallon, but that was a 2 cent increase from last week.

California: Southern California gas prices dropped for the fifth straight week but bounced up in the last couple of days in many cities, as oil industry analysts noted an increase in wholesale prices that may indicate the downturn is over, according to the Automobile Club of Southern California's Weekend Gas Watch.

The average price of self-serve regular gasoline in the Los Angeles-Long Beach area is $2.49, which is 3.6 cents lower than last week, 14 cents lower than last month, and 10 cents lower than last year.

In San Diego, the price is $2.49, which is 2.7 cents below last week's price, 19 cents below last month, and 10 cents below last year.

On the Central Coast, the average price is $2.66, down four cents from last week, 18 cents below last month, and seven cents lower than last year.

In the Inland Empire, the average price is $2.49, three cents below last week, 16 cents lower than last month, and 12 cents lower than last year.

"For the past seven years, California gas prices have started to go up in either January or February after a winter decline in prices during the lowest demand time of the year," said Auto Club spokesperson Carol Thorp.

"Refiners in the state are starting to switch over from producing the 'winter' blend of gasoline to the 'summer' blend that is mandated for California by air quality requirements, and the 'summer' blend is more expensive for refiners to produce," she said.

West Virginia: While major oil companies chalked up record profits, local motorists wondered where they could find enough personal profits to keep their gas tanks filled.

In Princeton, prices for regular unleaded gas ranged from $2.12 a gallon to $2.19. Stations along U.S. Route 460 in the Ambrose Lane area have prices as high as $2.25 a gallon and in Green Valley gasoline sold for $2.15 a gallon.

In Bluefield, Virginia unleaded gas was $1.98 a gallon Wednesday at the Corner Mart off Route 460, but it had risen to $2.08 a gallon by Thursday.

West Virginia has a tax on gasoline and other fuels. On January 1, 2007, the tax increased by 4.5 cents, raising the tax per gallon of gasoline from 6.5 cents to 11 cents per gallon.

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