The gas price windfall that has benefited motorists nationwide since last fall may soon bottom out, but average prices in the South Sound may still have some way to go yet before they begin their new year ascent.
That’s the word Tuesday from petroleum industry experts watching the markets for crude oil and motor fuel.
Though South Sound gas prices Tuesday still were some 22 cents higher than the national average, local prices are finally falling faster than the nationwide mean.
In the past week alone, average prices in the South Sound for a gallon of unleaded regular have dropped by 11.4 cents to $2.26 a gallon. Meanwhile on the national level, average prices dropped 6.5 cents a gallon to $2.04 in that same period. South Sound gas prices haven’t been so low in nearly five years.
In the last month in the Tacoma area average gas prices have declined by nearly 45 cents a gallon, according to TacomaGasPrices.com. The decline during the same period nationwide was just over 40 cents a gallon.
That gas price website reports the area’s lowest prices Tuesday were recorded by four Lakewood stations where a gas price war has been ongoing for weeks. Four stations in that Tacoma suburb were reporting unleaded regular below $1.99 a gallon. The price leader was a 7-Eleven 10814 Pacific Highway SW where gas was selling at the pump for $1.93 a gallon.
Fifteen stations in Pierce County were pricing unleaded regular at $1.99 a gallon or less just 12 days after the first station broke the $2 barrier in the county. Three Thurston County stations were selling gas for $1.99 a gallon Tuesday, and one station in Federal Way, a Costco store at 35100 Enchanted Parkway S., was below $2 a gallon.
Though South Sound gas prices may still drift a bit lower, some petroleum economists say the price decline which began last fall may have reached its limit nationwide.
“The light at the end of the tunnel is dimming as gasoline prices have nearly caught up with the drop in crude oil prices,” said Patrick DeHaan, senior petroleum analyst was GasBuddy. “Last week saw a rally in oil prices Wednesday before caving again Thursday then rallying again Friday, a sign that perhaps we’ve seen a bottom in oil prices and perhaps a bottom in gasoline prices as well,” he said.
“It certainly has been a great ride for motorists,” said DeHaan.
Joining the parade of “enjoy it while you can” prophets Tuesday was John Hofmeister, former president of Shell Oil.
Hofmeister said the decline in crude prices may be short-lived.
“The next round of high prices is likely to start later this year, as crude rebounds to the $80s and $90s, perhaps pushing to the $100 level by late in the year or early next,” Hofmeister, founder and chief executive of Citizens for Affordable Energy, told USA Today.
Growing global demand and a slowdown in output will fuel the rebound, he said.
“If new production capital is deferred and demand growth continues at 2 percent or more, we’ll see capacity constraints during 2016, an election year of course, drive prices higher. Whether we reach $4 a gallon or push past, it’s too early to tell.”
Gas averaged more than $4.00 a gallon in the South Sound as recently as the Independence Day holiday last summer.
Gas in the South Sound is now about $1.10 less per gallon than it was at this time last year. Nationwide, the average price is down nearly $1.25 a gallon over the same time in 2014.
Though South Sound motorists are paying substantially less to fill up these days, they would be seeing even further savings if they lived in the Midwest or South where gas prices are even lower. Twenty six states are reporting average gas prices less than $2 a gallon. Missouri prices are the lowest, $1.75 a gallon on average.
The nation’s highest prices are in a state, Hawaii, where much of the gas has to be shipped in. The average price there was $3.32 Tuesday.
John Gillie: 253-597-8663