Fears of a future price jump came from a Halloween explosion occurred on Line 1 of the Colonial Pipeline. It came as crude oil prices staged a retreat.
The average gas price rose by five cents of the past week in Delaware, but the biggest jump came in New Jersey where a 23-cent a gallon tax increase sent the price at the pump up 25 cents from a week ago.
One gas station in Newark kept its price at $2 a gallon.
Portions of Colonial’s system send gasoline and other transportation fuels as far north as New York Harbor.As of Sunday morning, Colonial reported that based upon their latest information, the pipeline was to have been restarted on Sunday.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
|11/6/2016||Week Ago||Year Ago|
$44.07 per barrel
$48.70 per barrel
|$50.65 per barrel|
At the close of Friday’s formal trading session on the NYMEX, West Texas Intermediate (WTI) closed down $4.63 from last week to settle at $44.07 per barrel.
Any jump in gas prices related to the pipeline disaster may be offset by tumbling crude oil prices as the global supply continues to cause concern.
Crude oil has closed below $47 every day this week.
Late last week, OPEC officials met in Vienna to hash out the details of a potential production freeze agreement, but several hours of discussions went nowhere.
Iraq and Iran have continued to voice concerns over participating in a production cut, and as a result, negotiations have stalled.
Traders will continue to monitor OPEC negotiations for any indication of an agreement in the days leading up to the next official meeting scheduled for November 30.
Boosting crude oil prices to about $50 a gallon could spur more drilling in the U.S. That would be good news for oil-producing states that have seen thousands of job cuts.
“Prices around the Mid-Atlantic region have remained steady and have dropped in some areas,” said Jana L. Tidwell, manager of public and government affairs for AAA Mid-Atlantic. “As long as the Pipeline issues are resolved quickly, prices should remain on the same track and even start to dip as crude oil prices are projected to stay low for a while, potentially until the election is over, balancing out prices at the pump.”
The supply chain response to the Colonial Pipeline’s current disruption may follow the response to the previous incident, with a drawdown of in-region inventories and increased reliance on alternative sources of supply such as long-distance trucking, marine shipments from the U.S. Gulf Coast, and imports.
Retail gasoline prices in the affected areas (most likely Georgia and Tennessee) may rise, but most Mid-Atlantic regions should see prices remain steady unless the Sunday restart sees a lengthy delay.
For further information on local fuel prices, check out AAA’s Fuel Price Finder (http://www.AAA.com/fuelfinder).