Montana Summer Fuel Prices Remain Steady

Helena, Mont. 7/30/10 – Since the official opening weekend of summer, Memorial Day, fuel prices across the state of Montana, on average, have settled in a small range of plus or minus eight cents – from $2.84 to $2.92 – per gallon, AAA reported today.

Current conditions may not hold the drama of two years ago, but they are notable for other reasons.  Summertime usually brings higher demand which influences retail prices.  Yet for eight weeks the price of self-serve regular gasoline has not stepped outside of this range in Montana, which is somewhat remarkable. 

Today, the average price of regular unleaded fuel in Montana is $2.87 per gallon; one cent higher than a week and a month ago, and only 24 cents higher than a year ago.  The current National average is $2.74 today.

“High crude oil inventories, weak oil demand and little evidence to suggest a vigorous economic recovery are all contributing to the relative stability of prices,” says Denice Harris, AAA Spokeswoman. “With these conditions in place, the traditional increases we witness during previous summer driving seasons appear unlikely.”

Several current events could change the present level of stability. We are entering what is predicted to be a strong Hurricane season, Venezuela is threatening to cut-off oil supplies to the U.S. and if Colombia moves ahead with a military attack; such events could become a spoiler to the relatively quiet fuel prices we have experienced this summer.

Crude oil prices have consistently hovered in the $70-$80 per barrel mark for several weeks.  Crude inventories are well ahead of their totals from last year and refiners continue to operate at about 90% utilization.  Late last week, the Federal Highway Administration released data showing that vehicle miles traveled in the U.S. had posted only a 0.1 percent increase compared to May of last year.  This is a significant indicator of overall demand weakness since May is traditionally the beginning of the summer driving season.