Local gas prices back to spring levels
EAGLE COUNTY, Colorado – Gas prices in the Vail Valley are on an upward swing again, but the trend may not last.
Average prices have jumped between 5 and 8 cents per gallon in the past week. Those averages are also near the highs posted in April of this year. That means prices are just higher than $4 per gallon in Vail, and are just above, or near, that mark in Avon.
“We hear about it 20 or 30 times a day,” West Vail Shell owner Rick Dilling said. “Most of it is pretty good-humored, though.”
Asked if he had any insights into the market this days, Dilling said he knows about as much about price fluctuations as anyone else in the valley.
“I get a fax every day telling me what the price is,” he said.
Dilling said he’s selling about as much gas as he has in the past, but is seeing more $10 or $20 buys and fewer fill-ups. That’s understandable. Filling a 25-gallon tank at $4.09 per gallon puts a puts a $102.25 swipe on a credit card.
Ironically, Dilling said that the higher the price of gas, the slimmer his profit margin, since his rent is based on gross sales.
Retailers and customers aren’t the only people wondering what the next weeks and months might bring.
Gregg Laskoski is an industry analyst with GasBuddy.com, a national fuel price tracking website. He said the Colorado area has actually fared better than the national averages over the past few months, primarily because the state’s refineries are fed from oil pipelines from area wells and Canada.
Laskoski said prices elsewhere in the nation have actually dropped 2 cents over the past week, thanks to a slide in the price of crude oil. Those prices have dropped significantly in the past week – from nearly $100 per barrel to just less than $92 at the close of the trading day Wednesday – despite unrest in North Africa and Middle East that included the murder of the U.S. ambassador to Libya.
“I don’t think anybody would have anticipated that,” Laskoski said.
In addition, the U.S. Department of Energy Wednesday morning released information about the nation’s supply of crude oil (up), gasoline (down fractionally) and refinery capacity (also up).
Beyond those immediate numbers, there’s more oil being produced in this country, and Canada is now the biggest exporter of oil to the United States.
The good news in all those numbers has led Laskoski to believe there may be still more good news on the horizon – meaning the next several weeks could see still more price drops.
On the other hand, there are always potential catastrophes in the international oil market.
No one knows if, or when, Israel may try to use force to slow Iran’s nuclear program. If that happens, it’s almost certain Iran would try to close the Strait of Hormuz in the Persian Gulf, through which roughly 20 percent of the world’s oil flows. Cutting off that supply line, even briefly, would create a big spike in the price of oil, Laskoski said.
Even without shocks to the supply system, Laskoski is wary of where the price of gas will be on the last day of the year. That price sets a kind of “floor” for the market going into price increases that always take place in the spring, and that price has risen – sometimes dramatically – since 2008.
A floor price of $3.50 per gallon or more on Dec. 31 could put prices firmly above $4 per gallon by spring, he said.
“It’s just a huge roller coaster,” Laskoski said.