Temperatures May be Hot, but Gas Prices Cool

Submitted by Matt Skryja of AAA: 

Gas prices are down throughout Northern California, according to the latest report from AAA Insurance, which tracks gas prices as a service to consumers. Every metro area in Northern California except Ukiah saw a drop in its average price over the past month.

The Golden State’s average for a gallon of regular, unleaded gasoline is $4.21, down five cents since last month’s AAA report on April 10.

For perspective, that’s six cents lower than California’s average price on this date last year.

Among all 50 states, California continues to have the third highest state average price for regular, unleaded gasoline. Hawaii is first and Alaska is second.

Northern California gas prices are now averaging $4.20, down three cents from last month. In the San Francisco Bay Area, motorists can expect to pay an average price of $4.29, which is a six-cent decrease.

The national average price of $3.76 is down by 16 cents, which is 21 cents less than the national price on this date last year, when it was $3.97.

“Global economic concerns have helped to pressure oil prices lower,” said AAA Insurance spokesperson Matt Skryja. “Investors buying behavior continues to have the largest impact on prices. They are looking for real or perceived impacts to supply and demand, so debt issues in Greece and France have been a concern, as a depressed economy can mean decreased demand for oil and gas.”

Bearish manufacturing and jobs data from the euro zone has also increased investors’ concerns of global economic weakness. This perception recently outweighed signs of economic recovery in the U.S. and China.

Weaker economies overseas would be expected to consume less crude oil, which puts downward pressure on prices. Furthermore, as economies overseas weaken relative to the U.S., the value of the dollar would be expected to strengthen.

As this happens, crude oil futures, which are priced in U.S. dollars, become relatively more expensive and thus typically a less attractive investment. This puts additional downward pressure on prices.

The dropping price of oil futures accelerated on comments by the Organization of the Petroleum Exporting Countries (OPEC) Secretary General that its member countries would keep production high in an effort to depress global oil prices to a “fair” price of around $100 per barrel.

The least expensive average price in Northern California can be found in Marysville and Ukiah where regular is $4.09 per gallon.

Of all the metro areas in Northern California where gas prices are tracked by AAA, Eureka has the highest average price at $4.45. This is also the highest price in the lower 48 states.

The least expensive gasoline in the country is found in Kansas City, Missouri. The average price of gas in that metro area is $3.34. Wailuku, Hawaii, holds the dubious crown for the highest average price in the nation, at $4.89 per gallon.

AAA Monthly Gas Price Averages: May 8, 2012

1. To get the best mileage possible, AAA recommends keeping tires at the proper pressure suggested by the vehicle manufacturer, performing routine maintenance and making sure fluids are clean and belts and hoses are in good repair.
2. The way you drive can also impact fuel economy. Smooth driving to avoid sudden stops and starts, planning errands and lightening your load also help conserve gasoline.

AAA’s Fuel Gauge Report is the most comprehensive retail gasoline survey available, with over 100,000 self-serve stations surveyed every day, nationwide. Data is provided in cooperation with OPIS Energy Group and Wright Express, LLC.

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