As reported by the Energy Information Administration, the U.S. average price for regular gasoline dropped three cents to $2.71 per gallon, declining for the second week in a row. This was 87 cents more than the average a year ago. On the West Coast, which includes Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington, the average slipped a penny to $2.94 per gallon. In California, the average fell two cents to $3.01 per gallon.
     Diesel prices also decreased for the second consecutive week, with the national average dropping four cents to $2.83 per gallon. The average is 57 cents more than the price a year ago. In fact, diesel prices declined throughout the country. On the West Coast, the average dropped about three cents to $2.92 per gallon, with the California price dipping two cents to $2.99 per gallon.
     The Oil Price Information Service (OPIS) reports that the five-week low price of crude oil represents a market that remains overpriced due to influences of the dollar and economic optimism, according to analysts. "Miserable" oil demand and China's bid to have large banks raise their reserve ratios are cited as big contributors to the recent $10 per barrel decline in domestic crude prices.
     OPIS goes on to report that the latest data from the California Energy Commission shows refiners cutting crude oil runs again as profit margins dwindle. According to the  Weekly Fuels Watch for the week ending Jan. 22, refiners processed 10.065 million bbl of crude oil, a decrease of just over 650,000 bbl from the previous week. Crude runs were the lowest last week since the week ending July 31 of last year.
     As late as December 3^rd, Reuters reported that investment bank Goldman Sachs predicted the $90 per barrel of crude for 2010 with prices rising to $110 for 2011. Some experts see the factors noted above as a reason to expect lower prices for crude, from $72 in the near term to $65 and as low as in the $40's for a barrel of oil long-term. Other experts state that very long-term the financial markets will support $50, but not much lower.

Chris Nobles
Commercial Fueling
Nella Oil Company