Sunday, February 26, 2012

Explaining Idaho's lower gas prices

We've gotten five or six entries in the Guess-the-Price-of-Gas contest. You have until 5 p.m. Wednesday to guess the lowest local price of regular unleaded on the Friday before Memorial Day. Whoever comes closest wins a $10 gift certificate to Carl's Jr.

In the meantime, here's some more information on gas prices. Hard as it may seem to believe, Idaho for now has some of the lowest prices in the nation, said AAA Idaho spokesman Dave Carlson.

U.S. demand for oil and refined products has been 5 percent to 7 percent lower this year and supplies are good, yet prices are surging. That could mean there's fear that oil supplies could be disrupted in the Middle East. Or it could mean investors are banking on good growth gains in economies around the world, Carlson said Friday in a statement.

Investors have helped push oil prices well above last year's numbers, and today's national average price for regular grade gasoline is $3.65, a full 42 cents more per gallon ahead of last year's record pace. Idaho's average price is on the rise too, up 8 cents in the past week to $3.23, but 42 cents lower than the average price. Idaho's average price is fifth lowest in the U.S.

"Oil is collecting a premium price, but all you have to do is look at where Idaho is compared to its neighbors to see something is drastically different this year in the regional scheme of things," Carlson said.

Oregon's average price Friday is $3.83 and Washington is at $3.78. But Wyoming ($3.08), Utah ($3.16) and Montana ($3.20) all have prices in the range of Idaho's $3.23 average.

What gives? It's all about where the gas is being refined. Refineries on the West Coast are likely paying more than $125 a barrel for the oil they use, but Idaho and other Rocky Mountain states have access to cheaper oil coming out of Canada and North Dakota, priced closer to $80 a barrel.

"The rapid escalation in oil prices in the past several weeks has yet to be accounted for at the retail level, so prices everywhere will continue to rise," Carlson said. Barring major market changes, gas prices are expected to rise between now and mid-May. Idaho's prices peaked at $3.79 the first week in May a year ago.

"We think it's reasonable to assume that some states will hit average prices well above $4, but barring refinery shutdowns, it's possible Idaho and some states might stay below that mark," Carlson said.

Here's a breakdown on pump prices around Idaho from Friday:

Boise: $3.23
Coeur d'Alene: $3.28
Pocatello: $3.08
Idaho Falls: $3.07
Nampa: $3.24
Twin Falls: $3.20

Send your Memorial Day predictions to bizmojoidaho@gmail.co.

Read more here: http://www.idahostatesman.com/2012/02/24/2008243/idaho-gas-prices-climb-on-higher.html#storylink=cpy

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