The average price of a gallon of unleaded across the state in the most recent survey was $2.14, that’s 60 cents cheaper than at this time last year. Many areas of the state have dropped below the $2 mark.
Department of Agriculture analyst Harold Hommes says supply continues to favor drivers, particularly when it come to gasoline. “All of those sectors — both on the crude side and certainly on the refined products — we just have more than ample inventories on both sides of that,” Hommes says. While the supply has kept prices low for consumers, he says the summer driving season and increased demand with summer driving has help producers.
“That’s probably been the saving grace for fuel prices if they’ve had nay support at all. I think it would have been sort of a disaster for oil companies, we could have seen much lower levels,” Hommes says. “But demand has provided some good strength but inventories keep gnawing at the oil industry — too much crude, too much refined products.”
Retail gasoline prices, and diesel prices dropped two cents in the past week. Wholesale ethanol also saw a two- cent drop. “Right now I think we’ve got all of our ethanol plants at least in Iowa and I think that is probably true throughout the nation, they are all producing,” Hommes says. “Corn, the primary feedstock is in ample supply and they are running at near capacity. So, again that sector has just got ample inventories available and that puts pressure on values.”
He doesn’t expect the price of gas to move up much for at least another month, and then some factors such as the end of the summer driving season will slow demand and may keep prices down. Hommes says as kids get back to school, vacations end, a lot of summer driving ends to ease demand, and then he says in the fall plants shift over to a much cheaper blend of fuel.
Hommes says that cheaper blend impacts the cost you pay at the pump. “That’s going to be coming through the pipeline, if it isn’t already throughout August, and that is going to be putting further downward pressure on fuel prices,” Hommes says.
The lower fuel prices are something that’s been seen across the country this summer. He says even California they are seeing prices that are nearing some of the lowest price gas in the country. He says Oklahoma, Texas and Louisiana usually are at the low end of gas prices nationwide.