MONEY Gas prices

5 Places Where Gas Prices Are Plummeting

gas prices at chevron gas station
Mike Blake—Reuters/Newscom

Prices have dropped at least 10¢ in one week's time.

Nationwide, the price of gasoline keeps inching lower. According to the AAA Fuel Gauge Report, the average of a gallon of regular was $2.710 as of Monday, nearly a nickel less than the average one week ago ($2.756).

“All but seven states in the U.S. saw a drop in gasoline prices over the last week,” the researchers at the gas price-tracking site GasBuddy.com noted on Monday. More importantly, the trend for lower and lower gas prices is one that’s expected to stick around for months: “It would appear that the latter half of the summer will bring cheaper gas prices than the first half while this autumn is shaping up to give this past winter a run for its money in terms of cheap gas prices.”

Drivers in some parts of the country are the beneficiaries of a particularly pronounced price break lately. Here are five places where average prices have dropped by 10¢ or more over the past week.

Southern California: Mercifully, gas prices in Los Angeles and Orange counties decreased for nine straight days recently, together lowering the average price of a gallon of regular by about 12¢, according to the (Los Angeles) Daily News. The price dip followed an extraordinarily painful period for drivers, who watched prices at the pump spike by more than 50¢ in a single week, hitting more than $4.50 per gallon at gas stations in places like Beverly Hills and downtown Los Angeles.

Statewide, the average price for a gallon of regular as of Monday is $3.83, the highest in the country and over $1.10 more than the nationwide average, per AAA data. Still, analysts say California gas prices should drop regularly in the days and weeks ahead, as the supply has improved substantially.

Ohio: Prices at the pump have dropped dropped 17¢ per gallon, on average, in one week. The current average statewide is now $2.46 for a gallon of regular.

Kentucky: Prices dropped 12¢ in one week, according to GasBuddy, and now average $2.50 per gallon.

Indiana: The current average is $2.44 for a gallon of regular, representing a decrease of 11¢ over the past week.

Michigan: Average prices dropped by about 10¢ per gallon over the last week in Michigan, where prices at the pump have also decreased by at least 10¢ in each of the past three weeks.

MONEY Gas

Low Gas Prices Expected Until at Least 2017

OPEC doesn't plan to cut production.

OPEC’s long-term strategy report, shown to Reuters in advance of a June summit, shows the 12-nation cartel thinks no one plans to slow oil production. With the cost of a barrel of oil about half what it was last year, that’s good news for drivers who can expect low gas prices until at least 2017.

TIME legal

Why New Jersey Doesn’t Let You Pump Your Own Gas

California Gas Prices Fall 9.6 Cents In One Week
Justin Sullivan—Getty Images A gasoline pump rests in the tank of a car on June 12, 2012 in San Anselmo, California.

The ban dates back to 1949

Lawmakers in New Jersey and Oregon are considering bills that would finally give drivers in those states the option to pump their own gas. But why was that practice banned in the first place?

Let’s start with the case in New Jersey. The Garden State’s ban on self-service gas stations, which are allowed in 48 states, began in 1949 when the New Jersey Legislature passed the Retail Gasoline Dispensing Safety Act. That law, enacted over concerns about the safety of consumers pumping petroleum themselves, was later followed by many other states. However, almost every state has since overturned their self-serve bans.

Some contend the New Jersey law was rooted in corruption, not safety concerns. There are also worries that young, inexperienced drivers run into trouble when visiting neighboring states and forced to pump their own gas for the first time (that was an issue for the author of this story when he drove in Pennsylvania as a teenager).

In both states, advocates say gasoline could be several cents cheaper if stations weren’t required to pay staff to pump gas. But thousands of jobs are also at stake if the practice ends.

That could all change now that lawmakers in New Jersey said Monday they intend to introduce legislation that would give drivers the option of self or full service at gasoline stations. That proposal comes about a month after a measure would allow drivers in rural parts of Oregon to serve themselves.

In some ways, these potential law changes could be a sign of the times. Roughly a year ago, a survey found that while Oregonians are almost evenly divided on self-service gas, voters under the age of 45 are strongly in favor of controlling the pump.

This article originally appeared on Fortune.com.

TIME Autos

Audi Just Invented Fuel Made From CO₂ and Water

Water, CO2 and green power are the ingredients for Audi e-diesel
Audi Handout Water, CO2 and green power are the ingredients for Audi e-diesel

The next step for the project will be industrial scale production

An Audi research facility in Dresden, Germany, has managed to create the first batches of diesel fuel with a net-zero carbon footprint — made from carbon dioxide (CO2), water and renewable energy sources such as wind or solar power.

Germany’s government has welcomed the new technology, created in partnership with a greentech company called Sunfire. Johanna Wanka, Germany’s Federal Minister of Education and Research, even test drove the fuel and called it, “a crucial contribution to climate protection and the efficient use of resources,” according to an Audi press release.

Manufacturing involves first breaking down steam into hydrogen and oxygen through high-temperature electrolysis. The hydrogen then reacts with CO2 to create a liquid called “blue crude.” This is then refined to make the e-diesel.

A visual infographic released by Audi explains the steps in detail.

Visual representation of Audi e-diesel
Audi Handout

The next stage for the project will be industrial scale production because Sunfire only has capacity to produce 3,000 liters (792.5 gal.) of e-diesel in coming months.

“If we get the first sales order, we will be ready to commercialize our technology,” said Sunfire CTO Christian von Olshausen in a company press release.

Read next: This Is How Much OPEC Really Earns

Listen to the most important stories of the day.

MONEY Gas

Can You Say Road Trip? Gas Prices Will Stay Cheap Through Summer

women on roadtrip, leaning out car windows
Alamy

Forecasts indicate that gas prices this summer will average $2.45—more than 30% cheaper than they were the year before.

It’s more or less tradition that gas prices spike in summer, hand in hand with vacation season and rising demand. Based on the new forecast from the U.S. Energy Information Administration (EIA), however, prices at the pump are expected to remain flat for months to come.

Since prices right now are dirt cheap compared to previous years—the national average of $2.39 per gallon as of Wednesday is $1.20 lower than the same day in 2014—that means big savings for drivers. What with cheap gas prices and increased fuel efficiency in today’s vehicles, average household spending on gas in the U.S. this year is projected to hit its lowest level since 2004. The typical household should expect to save $700 on filling up this year compared to 2014.

The EIA is forecasting a national average of $2.45 per gallon from April through September, and an average of $2.40 for 2015 as a whole. The last year that saw a cheaper average than this was 2009, when prices dipped dramatically to $2.35 after inching up consistently, from $2.25 in 2005, to $2.58 in 2006, and $2.81 in 2007, then spiking to $3.26 in 2008.

What’s truly remarkable is that the EIA estimates could be on the high side. The analysts at GasBuddy call for a national average of between $2.15 and $2.35 in June, for instance, compared to an EIA projection of $2.45 for the month. No matter what, as long as these estimates are in the ballpark, prices will be far cheaper than June 2014, when the average was around $3.60.

And yes, prices could even get cheaper as summer draws near, which is the opposite of what drivers have grown accustomed to. “We know that our assessment challenges the conventional thinking that believes retail fuel prices always run highest during the summer driving season,” GasBuddy senior petroleum analyst Patrick DeHaan said in a press release. “Barring any unforeseen events—like refinery breakdowns or hurricanes—current supply and demand fundamentals could put more downward pressure on retail prices even during the summer driving season.”

The experts at AAA agree, explaining, “Unless there are new regional refinery issues or global crude prices turn markedly higher, drivers can expect to see pump prices continue to slide leading up to the start of the summer driving season.”

MONEY Oil

What to Do When Oil Prices Sink (Again)

oil derrick
Alamy

An abundance of oil in storage and not enough demand from refineries could send oil prices plunging this spring.

After a steep drop late last year the price of oil has stabilized over the past month to right around $50 per barrel. However, that stability might not last long as there are signs on the horizon that the oil industry could be in for another leg down. That has some analysts suggesting that oil could hit $30 per barrel before rebounding later this year.

Growing concerns

In the International Energy Agency’s, or IEA, monthly report released this week it said it sees near-term trouble for oil prices. According to the Agency, its concern is that the U.S. might soon run out of spare storage capacity, which will put pressure on the price of oil this spring. The report noted that “on the face of it, the oil price appears to be stabilizing. What a precarious balance it is, however.” The report then went on to note, “[B]ehind the facade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly.”

Those aren’t exactly encouraging words for oil executives or energy investors. It’s leading to some dire short-term predictions for the oil price. For example, Goldman Sachs’ GOLDMAN SACHS GROUP INC. GS 0.23% president, Gary Cohn, said he thinks that crude could fall to as low as $30 per barrel this spring as storage capacity tightens up leaving fewer buyers of oil. It’s also not helping matters that demand for oil in the U.S. is lower in the spring as refineries switch over from producing home heating oil to summer blend gasoline. This leads to less demand for oil each spring, which could exacerbate this year’s oil glut with no other outlet for U.S. oil due to the export ban.

Longer-term gains

All that being said, there are also signs that once the U.S. gets past the spring glut it could see a sharp rally in the oil price later this year. That’s because U.S. oil producers have dramatically cut spending to drill new wells, suggesting that production should plateau and could even begin to decline by year end.

We’ve already seen this in North Dakota, which is the country’s second largest oil producing state. According to the state’s Department of Mineral Resources, oil production in the state peaked at a record high of 1.23 million barrels a day in December. However, in January, production slipped 3.3% to 1.19 million barrels as producers only completed 47 new wells to start the year compared with 183 well completions the month before. That trend toward lower well completions is expected to continue throughout the year as most producers in the state have cut spending by 50% or more as a result of the oil price plunge.

Meanwhile, global oil demand is now rising a bit faster than projections after failing to meet demand projections last year. The IEA raised its demand forecast for the second half of this year by 75,000 barrels per day bringing total projected global oil demand up to 93.5 million barrels per day for the year. This is as lower oil prices have helped spur demand for oil. In fact, even Europe saw its declining demand for oil rebound, as it was up 3.2% last December and up again by 0.9% in January.

This all suggests that the oil price could rally later this year as stronger than forecasted demand is met by a decline in supplies. Further, if OPEC does decide to trim its output at its June meeting it could hasten a rebound in the oil price.

Investor takeaway

The price of oil could be under a lot of pressure this spring as U.S. oil storage capacity fills up. However, the longer-term outlook is a bit more bullish as there are some signs that U.S. oil production is starting to slow its rapid growth with declining production in former growth darlings like North Dakota. That, combined with some recovery in demand could push oil prices meaningfully higher later this year. So, if you’re thinking about buying oil stocks, this spring could be the last great opportunity to buy near the bottom.

Related Links

MONEY Oil

3 Reasons Gas Prices Could Rocket Higher

150304_INV_GasPricesHigh
Scott Olson—Getty Images Members of the United Steelworkers Union and other supporting unions picket outside the BP refinery.

Unfortunately, the days of $2 gas appear to be in the rearview mirror.

Well, we had a nice run. After 123 straight days of falling gasoline prices, sending it below $2 a gallon in many states, we’ve come back to reality a little bit. In fact, gas prices have now risen each and every day for about a month. Unfortunately, gas prices could go a lot higher because of three storm clouds that appear to be on the horizon, which could combine to send gas prices rocketing higher.

Storm cloud No. 1: Rising oil prices

The dramatic drop in the price of oil in late 2014 caused gas prices to come down as well. We see this correlation in the following chart:

Brent Crude Oil Spot Price Chart

 

As we see there, the price of oil is down 45% over the past year, while the price of gasoline is down 32%. However, we can also see that both have bounced off of their bottoms from earlier this year. That’s because the price of oil has stabilized and is now starting to head higher as the oil market starts to see signs that it is working out some of its supply/demand imbalance issues.

Because those issues are being addressed, the oil market is now starting to point to a higher oil price later this year. That’s a recipe for higher gas prices, which is just what the U.S. Energy Information Administration is predicting, as we can see on the chart below.

Storm cloud No. 2: The big switch

One other thing you might have noticed from that above chart is that the price of gasoline is notably more lumpy than the price of oil. It’s something most of us notice at the pump each year as gas prices almost always rise in the spring. That’s because summer driving season is upon us, which leads to more demand for gasoline.

However, what really drives the price of gas up isn’t so much increased demand for gasoline in the summer, but the fact that oil refineries need to shift gears in the spring to focus on refining summer-blend fuels as opposed to winter-blend gasoline and home heating oil. Along with this switch, refiners also tend to undergo routine maintenance in the spring, which reduces their refining capacity. This adds up, and over the past few years on average, this has added $0.54 per gallon to the cost of gasoline each spring.

Storm cloud No.3: The picket line

This year, there’s a new wrinkle that could throw a wrench in the spring refinery maintenance season. The refining industry is currently at odds with the United Steelworkers union as the two have failed to reach an agreement on a new contract. As the dispute grows, workers at a dozen U.S. refineries have walked off the job, putting 19% of U.S. refining capacity at risk. The strike could continue to expand, as neither party is giving much ground on the disputed issues. This could lead to up to 63 refineries, which represent two-thirds of refining capacity, being affected by the strike.

So far, the strike has only resulted in one refinery in California being shut down, and that’s just because it was already undergoing maintenance, and its owner decided not to run the plant. However, shortly thereafter, an explosion at another California refinery took that facility offline, too, and cut the state’s refining capacity by 25%. This resulted in gas prices spiking in Los Angeles by $0.50 per gallon. This suggests that should the growing labor dispute lead to refineries across the nation shutting down, it could cause a big spike in what we pay at the pump.

Bottom line

Unfortunately, the days of $2 gas appear to be in the rearview mirror. Even without the rally in the oil price over the past few weeks, gas prices would have headed higher because of the normal spring switchover at refineries. However, this year, the price of gas could be under even more pressure to rise because of the possibility of a continued increase in the price of oil, and the possibility that the refinery strike causes a big portion of refining capacity to be taken offline.

I know that’s not the greatest of news, but if gas prices do spike, at least you’ll know why. And it’s a good reminder that instead of complaining about gas prices, an investment in the oil industry could offset some of the extra costs we’ll be paying at the pump and take away a bit of the sting of spiking prices.

MONEY Gas

Where Gas Prices Shot Up Nearly $1 Per Gallon in One Month

A cyclist rides by a sign at a gas station in Los Angeles posting the latest gas prices on Friday, Feb. 27, 2015. Gas prices in California soared overnight as a result of a combination of supply-and-demand factors worsened by the shutdown of two refineries that produce a combined 16 percent of the state’s gasoline.
Nick Ut—AP A cyclist rides by a sign at a gas station in Los Angeles posting the latest gas prices on Friday, Feb. 27, 2015.

Everyone is paying more at the pump lately. But California drivers have seen gas prices soar at an unbelievably fast pace.

In mid-January 2015, the national average for regular gasoline was $2.03 per gallon, and there seemed to be a strong possibility that gas stations would average under $2 nationally within weeks, or even days. Instead, that period marked what appears to be the bottoming out of the cheap gas era. After four months of consistently plummeting fuel costs, drivers began seeing gas prices inch up steadily—and then spike very recently.

Over the past week, the national average has crept up 2¢ daily, from $2.33 to $2.47 as of Monday, according to the U.S. Energy Information Administration. AAA data indicates that gas prices have risen 35 days in a row, for a total rise of 39¢ nationally.

While all drivers are paying more for gas than they did in the very recent past—more than a dozen states were averaging under $2 per gallon a month ago, but none are today—California has experienced an extraordinarily fast hike in prices at the pump. Apparently, an explosion at one oil refinery in the state brought about enough of a decrease in supply to send gas prices skyrocketing.

As of Tuesday, the average in California for a gallon of regular was $3.41, a rise of 96¢ over the past month and 43¢ during the last week alone. Nationally, gas prices are averaging a full $1 less than they were one year ago, even after the recent pricing surge. But in California, prices are only 45¢ cheaper than they were exactly 12 months ago, when the average was $3.86.

All signs indicate that drivers in California and all over the country will continue to be hit with rising gas prices. GasBuddy analysts forecast that prices will increase steadily during the next six to eight weeks, and AAA is predicting, “the national average price of gas could rise by 20 cents per gallon or more in March” alone.

Still, to put things in perspective, let’s not forget that gas prices averaged well over $3 nationally for entire years, and it seemed like a very big deal when the average dipped under $3 last fall.

“The good news is that most U.S. drivers should still pay less than $3 per gallon to fill up their cars this year,” AAA spokesperson Avery Ash said this week.

Not if you’re in California though.

MONEY Gas

Here’s What Americans Are Doing With the Gas Money They’re Saving

Gas nozzle and money
Tim McCaig—Getty Images

The government's Energy Information Administration estimates the average household will spend $750 less on gas this year. So where's that money going?

Americans are enjoying a nice raise at the moment, in the form of dramatically lower gas prices. The government’s Energy Information Administration estimates that the average household will spend $750 less on gas this year, which is like getting a roughly $1,000 raise, since the savings aren’t taxed. For a little perspective, the 2008 economic stimulus package passed by Congress designed to save America from the worst of the recession sent a maximum of $600 to American households.

The gas price drop means even more to struggling lower-income earners: the bottom fifth of earners spend 13% of their income on gas.

That’s the good news. The bad news? Retailers aren’t seeing much, if any, of that money.

Americans spent $6.7 billion less on gas in January than November, but retail spending actually fell slightly during that span. That means lower gas prices are not acting as a surprise stimulus plan for the economy.

So where is the money going? To the bank.

The Federal Reserve Bank of St. Louis recently reported that Americans’ notoriously low personal savings rate spiked in December, to 4.9%, from 4.3% the previous month. The cash that’s not going into the gas tank is going into savings and checking accounts instead.

Few Americans save enough money, and many have insufficient rainy-day funds. With the recession fresh in their minds, many Americans appear to be more concerned with restoring their severely damaged net worth than buying stuff.

But Logan Mohtashami, a market observer and mortgage analyst, suspects something else might be at play.

“People don’t think the gas price (drop) is a long-term reality,” Mohtashami said. Despite government predictions to the contrary, he says, consumers aren’t adjusting their spending to a new normal, and instead they’re holding onto their cash for the next rise in prices.

Again, that kind of pessimism is sensible, and it’s good for personal bank accounts, but it’s not so good for growing the economy.

How much are you saving thanks to lower gas prices? What are you doing with the “raise?” saving or paying down debt? Planning a better vacation? Driving a gas-guzzler more often? Let me know in the comments, or email me at bob@credit.com.

More from Credit.com

This article originally appeared on Credit.com.

MONEY Gas

Gas Prices Rise for the First Time in 4 Months

That incredible drop in the cost of filling up your car has taken a very small break.

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