State gasoline prices average $1.82

Ponca City Now - January 13, 2015 11:53 am

Oklahoma’s average pump price today, $1.82, is the second-lowest in the U.S., according to AAA. There are 17 other states with state averages below $2.00, led by Missouri at $1.76.

“Falling fuel prices are not an Oklahoma phenomenon,” said Chuck Mai, spokesman for AAA Oklahoma. “The national average has fallen for a record 110 consecutive days to $2.12 today.”

Oklahoma motorists are paying an average price at the pump today that is more than 48 percent lower than the 2014 peak of $3.53 reached in late June. The state average continues to test lows not seen since March 2009.

“Barring any major increases in the global price of crude oil, we really expect the national average price for regular gas to remain below $3.00 per gallon in 2015,” said Mai. “It’s likely the Oklahoma average won’t rise above $2.70 all year.”

According to FuelGaugeReport.AAA.com, motorists in 11 more states saw their average price at the pump drop below $2.00 per gallon over the past week, bringing the total number of states below this threshold to 18. The number could rise to 25 by the end of next week given current trends. Outside of Alaska and Hawaii, the highest-priced states today are New York at $2.61 and California at $2.58.

The dramatic slide in retail gas prices has been driven by a similar plummet in global crude oil prices since the end of the summer, a product of weak demand and abundant supply.

“The good news at the pump for motorists is tempered with the realization that in the U.S., where the cost of oil extraction is more expensive than elsewhere in the world, producers may be forced to reassess their plans to factor in profit margins that are sharply lower or even reversed,” said Mai. “Many small oil-patch companies have already been doing this. And, of course, gross production tax revenues going into state coffers will be down dramatically.”

In addition, countries such as Nigeria and Venezuela that rely heavily on oil revenues to fund government services may find themselves in situations where reductions to social programs are necessary, which could lead to civil unrest.

The global price of crude has lost more than half its value since mid-2014. Sustained low prices for crude can also potentially influence the way global markets are assessed. Last week, the spread between West Texas Intermediate and Brent narrowed to approximately $1.75 per barrel, causing market watchers to speculate whether the price of Brent will soon fall below WTI. Brent has not been priced below WTI since 2010, and less than a year ago it was trading more than $10 more per barrel.

At the close of formal trading on the NYMEX yesterday, WTI closed down $2.29 at $46.07 per barrel.

 

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