Gasoline prices have been falling slightly in recent days, and Iowa Department of Agriculture energy analyst Harold Hommes says it’s linked to lower oil prices.
“Crude oil markets have fallen here recently, West Texas intermediate is around that 90-dollars a barrel mark.I am quite frankly a little bit surprised we haven’t seen a greater fall in unleaded gasoline. I’m still expecting that to come in the near future though, a little bit of relief,” Hommes says.
The change over to winter blends and the production of more heating oil can impact prices, but Hommes says that’s already been figured in. “Most of the turnaround for the winter blends has already occurred and is in place at this time. So I don’t think as far as a supply issue that that’s part of the equation right now,” he explains. The price of natural gas, the main heating fuel used in Iowa, has moved upward recently.
“Six, eight months ago we hit decade lows, it dipped briefly below two dollars per million metric therms,” Hommes says. “Yesterday’s report had it at $3.22, so that’s up a good dollar from those lows. But we still need to keep in mind from an historical standpoint, 3-22 is a pretty low price and I don’t see an immediate bump in those levels.”
Hommes says the utility companies usually lock in winter supplies and week-to-week price fluctuations are not felt immediately like they are with gasoline. “Most of that supply going at this point in time in our calendar year is already in place for the winter heating season. And we’ve had it in place in anticipation for what normally would be grain drying, (which) also is a pretty heavy demand here in Iowa,” according to Hommes.
The latest fuel report showed the average price of regular unleaded gasoline averaged three dollars-81-cents across Iowa. That is two cents lower than last week and up 42 cents from one year ago.