Gasoline prices continue slide
Gasoline prices fell nearly 75 cents per gallon over the past year in Western Pennsylvania, an online analyst reported Monday, as oil prices driving the discount continued to tumble.
The average price at the pump dropped 7 cents last week to an average of $2.66 per gallon, according to GasBuddy.com's latest survey of 731 stations in the Pittsburgh region. Motor club AAA put the average price for Western Pennsylvania at $2.64 a gallon.
The national average is down about $1 since last year to $2.28 per gallon. The national average has fallen 95 straight days and is down 40 percent since June, AAA said.
Low global demand for oil, greater supply from shale producers and the refusal of large exporters such as Organization of Petroleum Exporting Countries to cut production pushed world oil prices to five-year lows over the past month. The low gasoline prices have benefited consumers, though investors are pounding energy companies and firms connected to drilling.
Experts say they don't know how long the price slide will last.
“The slump in crude oil has wavered slightly, and we're in the fourth quarter of the game. However, there is still a chance that crude prices resume their slump again and carry the pump plunge into overtime,” said Patrick DeHaan, senior petroleum analyst with GasBuddy.
In the most recent week, oil drillers idled the most rigs since 2012, industry supplier Baker Hughes said on its website Monday. Rigs drilling for oil declined by 37 to 1,499 in the week ended Dec. 26, the lowest since April, Baker Hughes said, extending a three-week decline to 76. Those drilling for natural gas increased by two to 340, the Houston-based field services company said. The total rig count, which includes one miscellaneous rig, dropped by 35 to 1,840, an eight-month low.
The number of rigs targeting American oil is down from a record 1,609 following a $55-a-barrel drop in global prices since June, threatening to slow the shale-drilling boom that's propelled domestic production to the highest in three decades.
As OPEC resists calls to cut output, domestic producers including Continental Resources Inc. and ConocoPhillips plan to trim spending.
“We should see the rig count going down at least through the end of the first quarter as a reaction to the low oil prices,” James Williams, an economist at WTRG Economics, an energy-research firm in London, Ark., said before the report. “By midyear, we should see measurable impacts on production.”
The international benchmark North Sea Brent oil and the U.S. counterpart West Texas Intermediate crude are trading at their lowest levels since 2009.
WTI futures fell as low as $52.90 Monday on the New York Mercantile Exchange, down more than half from the 2014 peak. Brent dropped to $57.37.
Trib Total Media staff writer David Conti and Bloomberg News contributed to this report.