As reported by the Energy Information Administration, the U.S. average price for regular gasoline increased six cents to $2.67 per gallon, 98 cents higher than the price a year ago. Prices rose in all regions of the country. On the West Coast, comprised of Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington, the average increased four cents to $2.90 per gallon. The average in California increased over a nickel to $2.99 per gallon.
     The national average price for diesel fuel gained nearly seven cents to settle at $2.80 per gallon, 51 cents per gallon higher than last year at this time. The average on the West Coast went up about seven cents to $2.91 per gallon, while the price in California rose six cents to $2.96 per gallon.
     According to the Department of Energy, gasoline supplies saw a big build at 3.7 million, mostly on the West Coast and in the Midwest. But despite a surplus of stocks, demand numbers continue to be dismal, with experts reporting a drop in demand of as much as 333,000 barrels per day to 8.741 million barrels per day for gasoline. Diesel demand didn't fare much better, dropping 11,000 barrels per day over the week. "That's the lowest [gasoline] demand figure I've seen in years," said one paper trader.
     The Oil Price Information Service says that despite high stocks and low demand, crude still gained $3.39 bbl on the week, putting prices at their highest level since the second half of October 2008, even on Friday, when the U.S. dollar lost about 0.6% in value.
     The Wall Street Journal ran an interesting article by Ben Casselman on Tuesday about drilling for oil in progressively deeper water. He reports that Western oil companies have announced tapping significant volumes of crude in the Gulf of Mexico as well as off the coasts of Ghana and Brazil. Only the major oil companies have the enormous amounts of money required to try to find oil - and not always to succeed - in harder to reach places. These successes are good news for the end consumers if the economics are allowed to play out. Unfortunately, Wall Street has incentive to make revenue directly from the rising price of crude oil, without the responsibility of actually handling the product. Domestic crude oil was up to $79.39 per barrel at the end of the reporting period last week and experts in the financial industry express hope for $85.00 per barrel prices later this year. Let's hope otherwise.

Chris Nobles
Commercial Fueling
Nella Oil Company