Shutdown may be a factor in lower gas prices
Hamilton JournalNews, Ohio
HAMILTON, Ohio — The government shutdown and fears of a new recession are among a host of factors helping to depress gasoline prices in the area and nationwide, a petroleum analyst with a fuel price tracking website said.
In the greater Cincinnati area, which includes Butler County, gasoline prices have fallen steadily throughout September, but in few places faster than here. Chances are, they’ll get lower still.
That’s largely because of the hyper-competitive nature of gas stations in the Great Lakes region, analysts say, with fierce competition that causes price swings that shoot both below the national average and above, with price hikes happening when stations seek to make up for lower prices earlier in the year.
If you are looking for cheap gasoline, Middletown may be the place to go as it has eight of the 15 gas stations with the lowest prices in the area, according to GasBuddy.com. The top five of those 15 gas stations are in Middletown.
According to GasBuddy.com, prices in greater Cincinnati for regular gasoline averaged $3.33 per gallon Wednesday, a drop of 12 cents from a week ago. Nationally, regular gas averaged $3.41 per gallon, about what it was a week ago.
By comparison, a year ago prices here were $3.69 per gallon for regular. The all-time high price for a gallon of regular gasoline was $4.18 on May 3, 2011.
A tame hurricane season, prospects of a peaceful resolution of conflict over Syria, and a seasonal decline in the price of oil are also helping push prices lower when the refiners switched over to the winter blend in mid-September, said Patrick DeHaan, senior petroleum analyst at GasBuddy.com.
The departure of speculative hedge fund money from oil investments and the prospect of an economic slowdown in the wake of government dysfunction has also helped drive prices low, DeHaan said.
The winter blend costs about 10 to 15 cents less to produce than the summer blend because it is not required to meet stricter clean air regulations, analysts say.
“The longer the (federal) shutdown, the more downward pressure will be put on gas prices,” he said. “A longer shutdown will have a more negative impact on the economy as a whole as it pulls gas prices and the stock markets down. If the economy goes into a recession, gas prices will go down significantly.”
DeHaan said the shutdown has had very little impact on the current downward price of a gallon of gas which may drop another five to 10 cents a gallon. “It’s not a big factor now but maybe in a week or so, depending on what happens,” he said.
With the end of the summer driving season, consumers typically see the lowest prices of the year between September and December, said Kimberly Schwind, spokeswoman for the AAA Club that includes Butler County.
Schwind said the government shutdown could affect oil and gas prices because they are commodities. She said gas prices could be affected if there are refinery problems, severe weather issues and the possibility of military action in the Middle East.
As gas prices shift downward, Schwind also said there were a lot of unknown factors to predict what gas prices may be in the future.
At the United Dairy Farmers store at North Verity and Reinartz boulevards where the price was $3.19 a gallon, the low prices at the pump are making most people happy but also say they could be lower. Some of the people say they also shop around for the lowest prices.
“Well, I think they could be lower,” said one woman who declined to be identified because she works at a different gas station. “There’s no sense of it being this high.”
Mike Wells, of Middletown, also agreed that prices could be lower.
“Gas is coming down a little bit,” he said. “I’d be happy if gas prices were what they were before (President Barack) Obama got elected.”
“They keep raising the prices and it goes down every so often,” he said.
Nancy Strait, of Middletown, said, “It’s great. I hope it stays that way.”