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Gas Prices Stable as Demand Remains Weak

What a difference a year makes

By Mark Huffman
ConsumerAffairs.com

April 24, 2009

The average price consumers pay for gasoline has hardly budged in the last week, as oil and gasoline supplies continue to be plentiful and demand weak. The national average price of self-serve regular is $2.059 a gallon today, up from $2.052 last Friday, according to AAA's daily survey.

Last year at this time consumers were being shocked every time they pulled into a gas station. What a difference a year makes. At this time last year the national average price of gas was $3.556.

Today there is a difference of nearly 66 cents between the cheapest and most expensive average gas prices in the U.S. Alaska continues to have the most expensive fuel, with an average price of $2.555 a gallon. Oklahoma and Missouri both have the cheapest average price, $1.898 a gallon.

Motorists in California are paying an average of $2.345 today. In New York, today's average price is $2.213.

Gasoline prices have been stable over the last several weeks, but prior to that time had been inching upward, despite little demand. Demand remains weak and Andrew Delmege, Manager of Regulatory Affairs for AAA, says new strength of the U.S. dollar is now forcing crude oil prices lower.

“As a result, international investors have found purchasing crude oil to be a less attractive investment,” Delmege said. “Generally, the stronger the dollar is against foreign currencies the more expensive it is for investors to invest in oil consumed by the United States – the world’s largest energy consumer.”

In addition, inventories for oil have continued to rise as the global recession further suppresses domestic and international demand. In fact, the U.S. Energy Information Administration's weekly report shows crude oil inventories in the U.S. rose 3.9 percent last week.

U.S. gasoline inventories actually rose by 800,000 barrels last week, surprising analysts who had predicted supplies would fall by about the same amount. With oil and gas supplies plentiful and demand still weak, analysts expect no big surge in prices at the pump as the summer driving season gets under way.

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