Fuel prices end year on moderate note


Retail gas and diesel prices in southern New Hampshire have remained one of the few relatively predictable economic indicators in a year rocked by recession.In a case of good news-bad news, the struggling economy has actually kept gas prices comparatively affordable when reflected against the historic highs of the summer of 2008.Current prices at the pump in Manchester on Dec. 30 were running $2.55 per gallon for regular gas and $2.76 for diesel, according to the American Automobile Association. Prices in the Portsmouth area, typically slightly more expensive, were about $2.57 for regular gas and $2.78 for diesel.Prices have wobbled just 4 cents over the last month, from $2.55 a week ago from $2.59 about a month ago.Diesel has been even less volatile over the past month, wavering from $2.76 a week ago from just a fraction cheaper at $2.756 a month ago.Nationally, gas prices averaged at $2.61 per gallon and diesel at $2.73 per gallon on Dec. 30, said the federal Energy Information Administration.Current prices compare favorably to late autumn in 2008, when prices dropped precipitously to between $2.50 and $2.70 from that summer’s highs of approaching $5 a gallon. The greatest price drops were seen in September 2008 when averages dropped from $3.63 to $3.06 in October 2008, then to $2.22 in November of that year.As the full effects of the financial crisis were felt in December 2008 and the early months of 2009, gas prices continued to drop to reach lows of about $1.56 in late December for regular gas – about a $1 less than today – before rising to about $1.75 in January and February.December 2008 also saw oil per-barrel prices drop to $40 – levels not seen since late 2004.Diesel prices remained much higher than the sharply falling regular gas prices, however, hovering between $2.30 and $2.40 a gallon, before reaching their lowest point at $2.295 in March 2009.Prices for both fuels began to creep up in the late spring, following their typical seasonal patterns.Interestingly, diesel remained about the same as gas – even costing less than gas this past June at $2.351 vs. gas at $2.418 – until about September.As the Great Recession drags on, consumer spending remains dampened. Less shopping, eating out and traveling means less fuel consumption, which means crude oil stocks have fallen by 1.5 million barrels to 326 million barrels and gas has fallen by 300,000 to 216 million barrels, according to the EIA’s weekly inventory report.This helped to push oil prices back below $80 per barrel, trading around $78 at noon.Of course, what goes down must go up when it comes to commodities. As the country, and the world, claws its way out of the recession, prices are expected to rise.Maybe.“Oil has the ability to be at $80 a barrel or slightly higher but it is unlikely to go above it unless there are further signs that the fundamentals are improving," Amrita Sen, an oil analyst for Barclays Capital, told the Reuters news service. – CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW
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