Gasoline prices continue falling…Consumer confidence at seven-month high with lower gasoline prices…BP seeks permission to resume some Alaskan oil production…
Retail gasoline prices fell for the sixth week in a row this week as lower demand and a calm hurricane season continues to translate into lower pump prices. The weekly AAA Texas gas price survey shows the retail price of regular, self-serve gasoline averages $2.44 per gallon statewide. That’s down 13 cents from last week. Houston’s average is at $2.37, down 15.5 cents. Nationally, the average price fell 13 cents to $2.58 per gallon. Auto club spokeswoman Rose Rougeau says several factors contributed to the price fall. Among them, she says, are lower demand after the end of the summer driving season, the calmer tropics and a steep fall in crude oil prices. Rougeau points out that crude prices fell below $64 a barrel this week after topping $78 in mid-July. The state’s cheapest gas was reported in Corpus Christi, where the price averaged $2.23 per gallon. That was after the state’s steepest price fall of 16 cents per gallon. The most expensive gas remains in El Paso, where the price averages $2.64 per gallon–despite a ten-cent decrease.
BP has asked permission to resume production on the eastern half of an Alaskan oil field that was closed last month over fears of pipeline leaks and corrosion. In its application to the Department of Transportation, BP says it wants production restarted so it can test the pipeline. The closure of the eastern half of Prudhoe Bay has cut production from the nation’s largest oil field by about half. A spokesman at the Department of Transportation’s Pipeline Safety Agency says the application is being analyzed for its thoroughness and to see if it addresses safety concerns. The review process can take up to three weeks. The pipeline agency’s top official told a Senate hearing this week that BP must supply detailed and credible evidence that a temporary fix to the line wouldn’t be an environmental risk.
Brazil’s state-owned oil company reportedly is in talks to buy a Japanese refiner affiliated with Irving-based Exxon Mobil. Japanese business newspaper Nihon Keizai reports today that Petrobras aims to expand in the booming Asian oil market by buying the refiner Nansei Sekiyu. Currently, the refiner is 87.5 percent owned by a Japan-based Exxon Mobil unit, with the rest owned by trading company Sumitomo Corporation. Exxon Mobil’s not commenting on the report. The report comes as the Japanese oil sector suffers from overcapacity amid dwindling domestic consumption. The newspaper reports it would be the first time an oil producer nation may have a refinery station in Japan, which relies almost entirely on imports. The paper also reports Petrobras plans to refine Brazilian oil in Japan to produce gasoline for demands in Japan and the rest of Asia, especially China.
Consumer confidence zoomed to a seven-month high as lower gasoline prices made people feel a lot better about the current economic climate and their own financial standing. The RBC Cash Index, based on the results of the international polling firm Ipsos, shows confidence rebounding to 93.7 early this month. That’s up from a three-month low of 74.8 in August, when soaring energy prices were blamed for giving consumers cause for concern. The recent drop in energy prices, however, has provided them with some relief and propelled confidence to its best reading since February. Economists believe price relief figured prominently in the upswing in consumers’ feelings about current economic conditions. This measure shot up to 118.8 in early September, up sharply from 92.1 in August. It’s the highest reading on record since Ipsos started the Confidence Index in 2002.
Consumer sentiment appears to be rising more than expected. Subscribers to the University of Michigan’s Consumer Sentiment Index say the mid-month report for September shows an increase to 84.4 from 82 in August. The early reading on the current conditions index for September is said to have shown a decrease to 95.7 from 103.8. The private research group says consumers’ expectation of inflation five years out pulled back this month to 2.9 percent, from 3.2 percent in August. The University of Michigan report is released only to subscribers. It will be revised at the end of the month.