Tulsa gasoline prices steady as crude oil dips to near $90 a barrel
BY Staff and Wire reports
Tuesday, March 05, 2013
3/05/13 at 8:17 AM
West Texas Intermediate crude oil fell below $90 a barrel for the first time in 2013 on Monday, but local gasoline prices remained close to $3.50 a gallon.
WTI for April delivery slid 56 cents, or 0.6 percent, to $90.12 a barrel on the New York Mercantile Exchange, the lowest settlement since Dec. 24. Prices fell to $89.33 in intraday trading. Volume was 19 percent below the 100-day average, Bloomberg News reported.
Crude has dropped 8.3 percent from this year's high of $98.24 on Jan. 30 as demand forecasts weakened and rising production pushed U.S. inventories to 377.5 million barrels in the week ended Feb. 22, the most since July 20.
On Monday, the market was dampened by a report that service industries in China expanded at the weakest pace in five months, adding to speculation that demand growth is slowing.
"We have disappointing economic news out of China," said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy.
He said $90 "is a critical level, and we are poised to fall rather quickly down to $88."
In Tulsa, however, the common price for gasoline remained at $3.49 per gallon, where it has been since late last week. Locally, fuel prices hit their highest level of the year when they reached $3.59 on Feb. 19.
Chuck Mai, who tracks gasoline prices for travel club AAA-Oklahoma, said refinery issues are a big reason why gasoline prices have failed to drop along with crude.
"Early each year, refineries shut down to switch over to summer blends," Mai said, referring to special formulas that are intended to reduce pollution in the peak driving season.
"Usually, this happens in March or April, but with the mild winter many facilities began switching in January. There also have been operational problems at some refineries. So, supplies of gasoline overall have been tighter, and prices have stayed high."
Even with a statewide average of $3.59, Oklahoma is among the 10 states with the lowest fuel prices. Wyoming is the lowest at $3.29, while California, Alaska and Hawaii are well above $4.00.
Consumers likely will not see a break in pump prices for a while, Mai said.
"It could be mid-April before there's a significant drop," he said.
Worldwide, the crude market remains unsettled.
The International Energy Agency on Feb. 13 trimmed forecasts for 2013 global oil demand for the first time in three months. The Paris-based agency reduced its demand forecast by 90,000 barrels a day.
"China brought further demand worries," said Bill Baruch, a senior market strategist at Iitrader.com in Chicago. "We broke a key technical level at $90, and the momentum is on the down side."
Brent for April dropped 31 cents to settle at $110.09 a barrel on the London-based ICE Futures Europe exchange. Volume was 24 percent above the 100-day average. Brent's premium over WTI widened for a third day to $19.97 as the entire Brent crude pipeline system remains shut after an oil leak was discovered.
China's nonmanufacturing Purchasing Managers' Index fell to 54.5 in February from 56.2 in January, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said over the weekend. The index's reading has been above 50, indicating expansion, for at least two years.
Tulsa gasoline price
Dollars per gallon
Previous day: $3.49
Month ago: $3.32
Year ago: $3.52
Record high: $3.93**
*Common observed price for regular unleaded.
**On July 18, 2008.
Sources: AAA-Oklahoma, Tulsa World staff.
Original Print Headline: Gas prices steady as crude costs fall
Tulsa World Business Editor John Stancavage contributed to this story by Bloomberg News.
Gasoline prices are posted outside a QuikTrip store at Peoria Avenue and Interstate 44. MICHAEL WYKE / Tulsa World file