July 27, 2006
Motor Fuel Demand, Prices Remain High
JEFFERSON CITY, MO, JULY 24, 2006 — On July 17, the average retail price for regular gasoline in Missouri was $2.86 per gallon, an increase of over $0.21 cents from last month and $0.68 cents higher than this time last year, according to the Missouri Department of Natural Resources Energy Center’s Energy Bulletin.
Demand for U.S. motor fuels remains near a 4-week average of 9.5 million barrels per day, despite a slight drop last week. While gasoline stocks increased 1.5 million barrels from the previous week and are 2.9 million barrels higher than last year at this time, analysts continue to be concerned over the potential for crude oil disruptions and a possible shortfall in gasoline production and imports later this summer.
Improvements in U.S. crude and gasoline supplies are helping to pressure oil prices lower, but U.S. refinery-related issues and ongoing violence in oil-producing nations, including Iraq and Nigeria, prevented crude prices from sliding further during the week ending July 14. Crude oil futures for August delivery on the NYMEX decreased $0.88 on Wednesday, July 19 to settle at $72.66 per barrel, the third day of losses and a 3-week low.
Military actions by Israel in Lebanon against the militant faction Hezbollah that began on July 12 threatens to extend into Syria and has focused the market on potential oil disruptions from the Middle East. Nuclear ambitions by Iran as well as its threat against Israel if Israel attacks Syrian-based Hezbollah operations, are lending to higher tensions with the West.
Despite the increase in Missouri’s average retail price for regular gasoline of over $0.21 per gallon since last month, the average price of $2.86 per gallon on July 17 remains below the U.S. and Midwest average retail price ($2.99 per gallon). The average retail diesel fuel price in Missouri was $2.91, an increase of over $0.10 per gallon since June 19 and $0.60 cents higher than July 2005. Missouri’s average retail diesel price also is below the U.S. average of $2.93 per gallon.
Natural gas prices for August delivery closed at $5.86 per MMBtu on July 19, a decrease of $0.73 when compared to the price a month ago (June 21).
Prices climbed since last Wednesday, July 12, with increases ranging between 1 and 61 cents per MMBtu at most market locations. Increased cooling load resulting from hot temperatures that prevailed in most of the Lower 48 States likely contributed to the price hikes. As a heat wave enveloped most of the country late last week, prices rallied, increasing from 1 to 61 cents at most market locations through Monday, July 17, but declined somewhat in trading during the next 2 days.