Gas price decreases in Berks and beyond may have stalled, analysts say

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A  nearly 100-day stretch of falling gas prices in southeastern Pennsylvania and nationwide seems to be stalling, industry analysts said.

The 14-week downward trend in prices, which started in June, was the longest streak since 2015 and followed a record spike that took the average price per gallon nationwide to more than $5.

The nationwide average increased only a penny per gallon Wednesday, but it could be a sign that the trend toward lower prices is slowing, analysts said.

The average price for regular gasoline in Berks County was at $3.81 per gallon Friday, about 1 cent below the state average of $3.80, and 12 cents below the national average of $3.69, according to AAA.

That’s a $1.20 drop from early June, when local drivers were paying an average of $5.01 per gallon as an increase in travel raised demand for gasoline and Russia’s invasion of Ukraine pushed up oil prices.

The current price is still almost 50 cents a gallon higher than the Berks average of $3.34 a year ago.

And the week-to-week price change was only 4 cents nationally, which was the smallest since prices started to plummet, according to AAA, and could signal an impending finish to the streak.

“All streaks have to end at some point, and the national average for a gallon of gas has fallen $1.34 since its peak in mid-June,” AAA spokesperson Andrew Gross said in a statement. “But there are big factors tugging on global oil prices — war, COVID, economic recession and hurricane season. All this uncertainty could push oil prices higher, likely resulting in slightly higher pump prices.”

The lowest price Friday in Berks was $3.66 per gallon at a location in Temple.

The average price per gallon Friday in the region was $3.77 in Montgomery County; $3.72 in Chester County, $3.73 in Delaware County; $3.75 in Lehigh County; and $3.83 in Schuylkill County.

“While some states continue to see gas prices trend higher, the majority have continued to decline. However, this week could change the downward trend,” said Patrick De Haan, head of petroleum analysis at the price comparison website GasBuddy.

“With some issues arising in Plains and Great Lakes states as the transition to winter gasoline begins, I think we have the best potential to see the weekly trend of falling prices snapped,” he said. “West Coast states also continue to see increases as unexpected refinery issues continue to percolate, preventing a downward move. While gasoline could nudge higher, diesel prices should continue to ease after a much-needed jump in inventories last week.”

The transition to winter-blend gasoline beginning in the Midwest could also have an effect, along with oil refinery issues on the West Coast, he said.

The good news, he added, is diesel prices should continue to ease as inventories increase.

Demand has also continued to decrease, according to the federal Energy Information Agency, but that has been countered by fluctuations in oil prices.

The EIA predicts prices will slide a little further down by December to a national average of $3.60 per gallon, then climb back to $3.70 by May, when the summer driving season and the switch to summer-blend gasoline begins.

“One key point from our short-term energy outlook is that we forecast record average annual crude oil production in 2023,” said EIA spokesman Chris Higginbotham. “Our forecast is that the United States will produce 12.6 million barrels per day of crude oil in 2023, which would surpass the previous record of 12.3 million barrels per day in 2019.”

The price for crude oil was at $83.62 per barrel at the end of trading Wednesday, which continued a slight price bump from the weekend, the Associated Press reported.

The question now is whether Wednesday’s penny increase in the nationwide average is just a blip or the precursor to the return of higher prices, the AP said. The answer matters to motorists and to President Joe Biden, who has taken credit for driving prices lower by releasing millions of barrels of oil from the nation’s reserves.

Gasoline prices mostly reflect trends in global oil prices, and crude prices have been slumping since mid-June on growing fears of a global recession that would reduce demand for energy, the AP reported.

Changes in sentiment about the economy, Russia’s war against Ukraine and even hurricane season — always a threat to disrupt refineries along the Gulf Coast — make predictions uncertain.

“I suspect that we will see choppy prices for gasoline through year end, with some down days and up days,” Tom Kloza of the Oil Price Information Service told the AP.

He predicted the next streak will be a run of price increases early next year, driven by investors, speculators and the fear that there won’t be enough fuel to go around.

Phil Flynn, an analyst with the Price Futures Group, told the AP that prices will head higher once withdrawals from U.S. Strategic Petroleum Reserve — a million barrels per day for six months — end this fall.

“The market is going to start pricing that in, and refiners are not going to be getting this cheap oil from the reserve,” Flynn said. “The odds are we’ll see a significant price spike of oil come winter.”

Some businesses, such as airlines, have been able to pass higher fuel prices on to their customers. Others haven’t been able to do that.

“We haul for farmers, and we can’t raise (prices) for the farmer because they are struggling, too,” Mike Mitchell, part owner of Mitchell Milk Hauling, which carries about 10 million pounds of milk a year from farms in northwestern Pennsylvania, said in an AP interview.

The company’s seven trucks burn through about $20,000 in gasoline a month, and the drop in gas prices this summer provided only limited relief, he said.

“Everything else you buy goes up,” Mitchell said. “Every part for the truck has doubled, just about.”



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