Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )

U.S. drivers hitting the road for the holiday weekend will save some extra cash at the pump, the Energy Information Administration reports current gasoline prices are the lowest since 2004. Average prices on August 31 were $2.51 per gallon – $0.95 lower than one year ago. The Gulf Coast is currently enjoying average prices below $2.20, while California drivers are paying more than $3.30 per gallon due to tight supply and recent unplanned refinery outages.

Are We Heading Lower?

Summer driving season is winding down, but Americans made their mark on the auto industry in its busiest time of the year. A record amount of miles were logged in the first six months of 2015 and auto sales are near all-time highs. Despite the high demand and activity to date, there is still excess supply on the market that will carry over into the winter season. The EIA explains, “As fall approaches and U.S. driving levels are lower, reduced gasoline demand, shifts to less costly winter specifications for gasoline, and reduced crude oil purchases by refineries undergoing seasonal maintenance have the potential to put downward pressure on crude oil and gasoline prices.”

The forecast is reflected in the EIA’s Short-Term Energy Outlook for August 2015. The Administration expects full-year 2015 prices to average $2.41/gallon, while costs will decline to $2.11 in Q4’15. Refineries continue to run at record highs and are benefiting from margins of the West Texas Intermediate/Brent spread. Consumption is expected to remain steady in 2016.

The Export Ban and Its Effects on Gas Prices

Earlier this week, the EIA published a report detailing the repercussions of lifting the maligned crude oil export ban. The report found that, since gasoline prices are tied to the Brent spot rather than West Texas Intermediate, lifting the ban would most likely shrink refiner margins and lead to even cheaper prices at the pump.

Source: GasBuddy.com

Source: GasBuddy.com


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.