Oil well (photo by John Hill)Enlarge Photo
If you're getting out on the road this Labor Day weekend visiting friends or family, you may be pleased to hear it'll cost you a little less than it did this time last year.
The U.S. Energy Information Administration's (EIA) 'Today in Energy' brief shows that average U.S. gas prices are as low as they've been in four years, if not quite matching the low prices of 2010. The cause? Ample oil supplies.
As of August 25, the average retail price for regular gasoline was $3.45/gallon.
That's not only cheaper than in previous years but $0.25 cheaper per gallon than gas prices in June.
A reduction in North Sea Brent crude oil prices has caused the changes, with per-barrel oil prices dropping from $115 in June to $102 by August 22.
The EIA suggests the market's perception of reduced risk for Iraqi oil exports has helped lower oil prices, though the oil industry's maintenance season in the Autumn is also thought to be a cause--reduced crude oil buying during this period helps push prices downwards.
Prices do vary significantly by locality, however. If you live virtually anywhere on the West Coast, as well as Alaska or Hawaii, you can expect to pay over $3.80 per gallon, perhaps more than $3.91 according to prices compiled by GasBuddy.
You'll pay the least if you're living in Arkansas, Louisiana, Mississippi, Alabama, South Carolina or Virginia, where drivers in many areas will pay between $2.99 and $3.11 per gallon. New Jersey is similarly cheap, while neighboring New York has some of the highest prices on the East Coast.
Texas is cheap too, as The New York Times points out--where its own oil boom is having a downward effect on prices. Research is turning up new shale oil reserves, the dubious process of 'fracking' helping contribute to a reduction in imported oil by over a third in recent ears.
Tom Kloza, chief oil analyst at GasBuddy, told the Times that it's a "relief"--and that American consumers have collectively saved $700 million a week this August compared to last year's figures.
New American oil is taking the strain off the country during times of Middle Eastern unrest--times which might have pushed per-barrel prices to more than $200 on occasion.
The bottom line is that between reduced imports and greater market confidence, anyone on the roads this Labor Day weekend won't have to pay quite as much at the gas station.
If you drive a plug-in car of course, you won't have to worry anyway...