Gas Prices Not Expected to Come Down Before Year's End

Source:

"The consumer confidence index. . .is now at its highest since September 2008."

The July WTI crude oil price is a basic no change, down 21 cents to $61.46 a barrel. The spot market gasoline price was up 1 cent per gallon and diesel no change on Wednesday morning. The average price for regular unleaded gasoline is $2.421 per gallon in the U.S. with the West Coast at $2.667 per gallon.

U.S. motorists were expected to drive a little more this Memorial Day weekend with renewed optimism that the economic slump has hit bottom. Expectation of gasoline use was put at 1.8% higher than it was on the Memorial Day weekend last year.

The consumer confidence index for May jumped to 54.9 from 40.8 in April 2009. The index is now at its highest since September 2008.

Over the weekend we did have some bad news with the possibility that Nigerian violence will cut oil output. ChevronTexaco (CVX) was forced to cut off about 100K barrels of crude oil supply representing about one fourth of the total output for Nigerian crude oil. Most of that crude oil is destined for U.S. refineries and any interruption in the supply of crude oil will have an immediate impact on prices.

By far the most positive comment for the immediate future of oil prices was the statement released by the Saudi Arabia oil minister Ali al-Naimi over the weekend. He stated that OPEC will likely stay the course with regards to production cuts at the upcoming meeting this Thursday in Vienna.

Keep your gas tanks full as gasoline prices are not expected to come back down any time before the fall of this year.

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