Rose Rougeau Prices Quotations

The price of gasoline at the wholesale level declined sharply last week and there continues to be downward pressure on gas in Texas. Motorists may be in for a few weeks of slightly lower prices. But toward the end of the month, it's likely that pump prices will resume an upward arc.

We may see prices even higher because of the hurricane. I don't think we've seen the end of record crude prices.

Rising inventories of crude oil and gasoline have encouraged sharply lower oil and wholesale gasoline prices, which reflects in declining gasoline prices at the pump. Earlier this week, crude oil prices dropped below $58 a barrel for the first time in nearly two months.

Retail gasoline prices have moved higher against a backdrop of increased crude oil prices. A year ago, crude oil traded at $49 a barrel and gas prices averaged $1.792--49 cents lower than the current average of $2.283. This week, crude hovers around $66 a barrel.

Retail gasoline prices have gone up 15 cents in the past two weeks. The increases can be traced to investor speculation leading to higher prices for both crude and wholesale gasoline. With crude trading around $64 a barrel, it doesn't appear likely gasoline will fall below $2 a gallon anytime soon.

Crude prices pushed near the all-time record high of $70.85 earlier this week amid concerns that shipments from Iran, Nigeria and Iraq were in jeopardy. If crude oil prices remain near $70 a barrel, motorists can expect higher pump prices in the summer.

Crude oil prices that continued to stay below $65 a barrel this week, fueled by the warmer than normal winter weather across the U.S., have helped drive retail gasoline prices slightly lower. It remains to be seen however, if these relatively modest declines in retail gasoline prices will continue with the geo-political concerns over Iran's nuclear ambitions.

The trend may continue as strong demand combined with uncertainties about gas and ethanol supplies in the coming weeks may keep prices on their upward course.

These recent decreases at the pumps are more likely to be temporary. The U.S. concerns over Iran's nuclear ambitions and violence in Nigeria have kept the price of crude above $65 a barrel -- a level not seen since the hurricanes of 2005. If crude continues to stay at this level, motorists will continue to pay high prices at the pumps.

Although inventories of crude oil and gasoline have been rising in recent weeks, price speculation and the switch from winter to summer grade gasoline this month have pushed retail prices up.

Conditions indicate that motorists may see slight increases in retail gasoline prices within the next few days. Typically, pump prices in Texas move lower during this time of year due to a decrease in demand, but with crude oil trading around $63 a barrel that has yet to happen.

After the New Year, pump prices in the state typically turn down due to a decrease in demand.

Higher gas prices will not deter Texans from traveling this holiday. Nearly 5.1 million Texans are expected to travel for the Christmas - New Year's holiday, up 1.4 percent from last year. When you factor in hotel and rental car rates, gasoline remains a relatively small part of most family travel budgets.

For the past month, gasoline prices have fallen as inventories of gas and crude oil continued to show a healthy surplus compared to last year. Motorists can expect to see relative price stability for the next couple of weeks.

The jump in retail gas prices is partly due to the seasonal production switch from winter- to summer-grade gasoline, which usually brings higher prices as output is temporarily reduced.