3/11/2013 7:39 PM ET|
Gas prices have dropped 9 cents in March
Nationally, the average price is just under $3.70 a gallon. Crude oil prices could decline, bringing pump prices down further. Airline stocks have been the winners. Energy stocks have been flat.
The national average price of regular unleaded gasoline fell to $3.696 a gallon on Monday, according to AAA's Daily Fuel Gauge Report. That's down slightly from Sunday and down 9 cents, or 2.4%, from a peak of $3.786 reached on Feb. 27.
Gasoline at the pump is down in part because crude oil has mostly drifted lower this year. Crude oil (-CL) in New York was flat on the day at $91.99 a barrel on Monday afternoon. Brent crude, which has more of an effect on gasoline prices, was down 54 cents to $110.31.
But there are other reasons: Europe's economy is sagging again. The British are apparently headed to a triple-dip recession, and there's even talk in Germany of abandoning the euro.
Both crises are combining to push the dollar higher against the euro and the pound this year. The dollar is up 2.2% against the euro and up 9.4% against the pound this year. And refiners are finishing up annual maintenance and the reformulating of gasoline for the summer driving season.
So how far will gas fall to? Maybe to $3.30 a gallon if the price charts on AAA's website are an indication. But if the U.S. economy survives the current budget battles in Washington -- sequestration now and a battle over the budget directly -- you might see a short-blip higher.
The softening of oil prices has been a contributor to a big rally in airline stocks. United Continental Holdings (UAL), the parent of United Airlines, is up 32% this year. Delta Air Lines (DAL) has gained 37%, and Alaska Airlines (ALK) is up 33%.
The gains are due in part to lower fuel prices but also stronger-than-expected passenger traffic this year.
The gains are also the reason the Dow Jones Transportation Average ($DJT) is up 18.9% this year and appeared poised to close at a new high on Monday. It hit an intraday peak of 6,188 on Wednesday.
Energy stocks were up slightly on Monday. Exxon Mobil (XOM) was up 29 cents to $89.26. Chevron (CVX) was up 4 cents to $118.61.
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