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Pumpin'
Gas
Brian
Trumbore
President/Editor, StocksandNews.com
With all the talk of rising gasoline
prices, once again, and the upcoming "summer driving
season," as if the other nine months of the year we
stay home, I thought I'd peruse the databank over
at the Energy Information Administration (eia.doe.gov)
and pass along how the price of gasoline acts during
each of the four seasons.
What
I have done below is take the national average retail
gasoline price at the pump for the 4th week of each
month where the season changes?December, March, June,
September. [For the EIA's purposes, the week ends
on a Monday. So for the week ending March 19, 2007,
the price was $2.62 on average for "all grades, all
formulations," not simply "regular."
How
to read this:
1900?W?100?SP?110?SU?120?F?110
[Year,
season, cents per gallon the 4th week in Dec. 1899.
So during the winter, the price of gasoline rose from
$1.00 to $1.10, then from $1.10 to $1.20 during the
spring, and fell from $1.20 to $1.10 over the summer.
]
1996?W?112?Sp?121?SU?128?F?125
1997?W?127?SP?125?SU?123?F?126
1998?W?116?SP?104?SU?109?F?105
1999?W?.97?.SP?105?SU?115?F?130
2000?W?131?SP?154?SU?169?F?158
2001?W?145?SP?144?SU?158?F?152*
2002?W?111?SP?138?SU?142?F?143
2003?W?144?SP?173?SU?153?F?168**
2004?W?152?SP?178?SU?196?F?195
2005?W?183?SP?219?SU?225?F?285***
2006?W?224?SP?254?SU?291?F?242****
2007?W?238?SP?262
[3/19]
Notes:
Again,
the prices are for "all grades, all formulations."
The current average pump price for "regular" is around
$2.50.
*The
price before and after 9/11 was little changed. On
8/27/01 it was $1.52; 9/17?$1.56; 9/24?$1.52
**Before
and after Iraq War started (3/19/03). 3/3/03?$1.72;
3/24/03?$1.73
***Katrina
(hit on 8/29/05). 8/1/05?$2.33; 8/29/05?$2.65; 9/5/05?$3.11;
9/19/05?$2.83. The price listed above, $2.85, is for
9/26/05. [Just to refresh your memory, oil, gasoline
and natural gas all spiked big time because of the
damage to the energy infrastructure both in the Gulf
and along the coast. But shortly after it was determined
that most of it could be repaired and brought back
on line in fairly short order, so the markets calmed
down.]
****Summer
2006. From 7/10/06 thru 8/14/06, the average retail
price was at $3.00 or better. It then declined 10
weeks in a row, 8/14/06 thru 10/23/06, to $2.25.
So
what can you deduce from all the above? For the last
nine years, including this one (and making an assumption
as to the next few months), the price of gasoline
rose from the start of winter to the start of summer.
Also, in seven of the last nine years the retail price
has declined during the fall, with the other two being
essentially unchanged.
And
going back to 1996, you can see that the market, as
measured by the price of gasoline, has already discounted
the impact on supply and demand for the "summer driving
season" right about when summer starts! [Except for
the Hurricane Katrina shock.]
[Taking
out any geopolitical or weather-related shocks, as
well as any drastic moves by OPEC on the supply front,
the price of gasoline is more about refinery output
than anything else. It also has to do with the fact
this nation hasn't built any new ones in over three
decades (though we've expanded capacity at existing
facilities). As the refiners undergo key maintenance
in the winter and spring, while gearing up for the
switch to summer blends in many parts of the country
as mandated by state governments, that takes a lot
of supply off the table; ergo, prices tend to rise
given generally static demand.]
As
I've pointed out in a few past Wall Street History
columns, it's all kind of like the yearly talk of
a "summer rally" in stocks. Summer is the worst of
the four seasons, in actuality, when it comes to equity
performance.
Wall
Street History continues next week.
Brian
Trumbore
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