Gasoline prices continue slide
It’s been another volatile week for oil and natural gas prices, but consumers continue to benefit as local gasoline prices slide.
Oil prices recovered a bit Thursday, a day after U.S. benchmark West Texas Intermediate crude briefly dipped to less than $50 a barrel for the first time in more than a year. The price is off from a nearly fouryear high of more than $75 a barrel the first week of the October.
The price drop has been led by eased U.S. sanctions against Iran, booming U.S. production, concerns about a potential trade war between the United States and China, and fear of a slowing economy in the U.S. and other parts of the world.
Oil traders increasingly are expecting leaders of the Organization of Petroleum Exporting Countries and other producers, including Russia, to agree next week to cut production. Traders on Thursday also pushed oil prices up in part because of news that U.S. and Chinese leaders could be working on a deal to limit tariffs and on speculation that the Federal Reserve board might slow its interest rate hikes.
Oil on Thursday added $1.16, or 2.3 percent, to close at $51.45 a barrel.
While oil prices have fallen, natural gas has surged in recent weeks, led by cold temperatures and relatively low storage levels. U.S. benchmark Henry Hub prices slipped 9 cents to $4.65 per thousand cubic feet.
Benchmark prices are important for trends and other metrics, but producers are most concerned with prices in their particular areas of operation. Booming production often leads to localized price discounts until pipelines can be added to handle the new production.
That is particularly the case in the Permian Basin in west Texas and southeast New Mexico, where pipeline bottlenecks this week led a small amount natural gas to be sold for negative prices — with a producer paying a pipeline company to take away its natural gas.
More than a half dozen pipelines are under construction in the area, promising to allow much more oil and natural gas to flow out of the area.
In Oklahoma, the pipeline bottleneck has been much less of a concern, although in many cases product still is selling at a discount to the benchmark prices.
Oil and natural gas prices are notoriously volatile. Swings over several days to several weeks have relativity minor effects because most companies lock in sales prices for at least a portion of their production.
But the recent swings are particularly important because of the timing. Oil company executives and directors are setting their 2019 budgets. Projections today likely are much different from what they were expecting two months ago.
While recent price swings have created headaches for oil executives, they have led to significant savings for consumers.
Oklahoma City’s average price for regular unleaded gasoline tumbled to just more than $2 a gallon on Thursday, with the 15 lowest stations at $1.78 a gallon or less, according to GasBuddy.com. The average price is down almost 9 cents over the past week and off 39 cents over the past month. The price is about 17 cents less than one year ago.
Nationwide, gasoline sold for an average price of almost $2.49 a gallon on Thursday, down about 7 cents over the past week and about 32 cents less than one month ago. The national price is down less than a penny from one year ago.