At $2.63 per gallon, the U.S. average price for regular gasoline was half a cent above last week and 94 cents higher than a year ago, according to the Energy Information Administration. The average on the West Coast, which includes Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington, slipped half a penny to $2.86 per gallon. The average in California fell a penny to $2.91 per gallon.
     Recording the fifth consecutive weekly decrease, the national average price for diesel fuel slipped a fraction of a cent to $2.77 per gallon. The average is 26 cents per gallon higher than the average last year at this time. The price for diesel fuel in California fell less than one cent.
     Fuel demand advanced again above 9 million barrels per day last week and on a four-week basis is 1.2% above last year. Experts suggest that at the end of 2009 the level of stored motor fuel may be the highest since 2004 (214.3-million bbl), and that there is a reasonable chance current levels of 216.3 million bbl might be sustained. This would result in the highest year-end inventory since 1993.  Even though demand is improving, the high amounts of fuel in storage and sagging crude prices have allowed retail fuel prices to decline.
     OPEC output has reportedly increased to its highest levels in about a year, estimated at about 60% of stated quotas. Although much of the increase has been absorbed by Chinese demand, the sharp price decline of the past month along with higher output would indicate that the price of crude will continue to be weak. From the third week of October until the first week of December, OPEC weekly average oil prices have oscillated within a narrow range from 75.79 to 77.11 dollars per barrel. In the five trading days last week, however, the OPEC price dropped constantly from 75.76 U.S. dollars to 70.85 U.S. dollars per barrel.

Chris Nobles
Commercial Fueling
Nella Oil Company