Gasoline in the Pittsburgh area dipped 4 cents in the last week to $1.96 a gallon today, continuing a prolonged plunge as the global oil market shows no signs of easing, according to price-tracking website GasBuddy.com.
Advancements in drilling technology such as fracking has produced an oversupply of crude oil that has nowhere to go. Coupled with concerns that demand is waning from China, which has been hungrily consuming natural resources for several years, has pushed down oil prices to as low as $27 a barrel in January. This morning, they hover around $30 a barrel — about a quarter of what they were during the summer months of 2014.
More recently, ceaseless production from the Middle East — particularly 500,000 more barrels a day expected from Iran now that Western sanctions have been lifted — have further depressed prices.
It all amounts to the lowest gasoline prices this area has seen since April 2009.
GasBuddy analysts said in November they thought Pittsburgh prices could bottom out around $2.15 before rising as refineries shut down for routine maintenance in the spring. But Pittsburgh — and the rest of the country — has continued its decline into February. The national average lost 5 cents in the last week to $1.74 a gallon today, the site reported.
Refineries haven’t yet begun temporary outages to convert production to summertime gasoline, and so in the meantime they are churning out as much winter time gasoline as they can, said
“Gasoline fundamentals continue to be remarkably weak as refiners continue to churn out (wintertime) gasoline, incentivized by cheap crude oil,” said Patrick DeHaan, GasBuddy senior petroleum analyst. “This has put retail gasoline prices under tremendous pressure as gasoline inventories rise to their highest January level since records started in 1990.”
On Jan. 29, Pennsylvania’s statewide average fell below $2 a gallon, and on Feb. 1, Pittsburgh dipped below that mark. Since GasBuddy has begun gathering price data in 2000, the lowest gasoline has averaged is $1.72 a gallon on Jan. 5, 2009.
Daniel Moore: email@example.com, 412-263-2743 and Twitter @PGdanielmoore.