AAA Fuel Gauge Report Overview
By Geoff Sundstrom
Director, AAA Public Relations
Monday, March 9, 2009

(A podcast of this commentary is available at www.aaanewsroom.net)

Oil’s slippery nature is on display again this week as the price slid to the upside today, closing at its highest level in two months. Today’s price of $47.16 per barrel was supported by comments from China that it is considering purchasing strategic assets such as oil and gold with some of it nearly $2 trillion in foreign-exchange. The news was considered significant because it came in the form of an editorial by the head of China’s energy ministry and was published in a paper owned by the government. China is one of the world’s largest buyers of U.S. government debt, so the possibility of a move by that nation into other asset classes has the ability to move markets world-wide.

Also roiling the barrel today was news that OPEC may agree to additional production cuts when it meets on March 15. OPEC says it has already cut production by more than 4 million barrels per day since last September. Whether the Cartel will follow through with additional production cuts remains to be seen, however, since some analysts say existing quotas are being violated by member nations trying to raise more revenues at their partners’ expense. Earlier this month, Iran said it would not support a reduction in oil output.

With regard to retail gasoline, the nationwide average price of self-serve regular gas remains near $1.95 per gallon this week. It seems the industry isn’t ready to breech the $2 per gallon level, even though wholesale gasoline numbers suggest higher prices could be around the corner. Reformulated (RBOB) gasoline traded today near $1.33 per gallon. That’s about 10 cents per gallon higher than where the wholesale price spent a lot of time the last few weeks.

Interestingly, ongoing and emerging global security issues – including a planned missile launch by North Korea, a near skirmish between the U.S. and Chinese Navies, more reports that Iran is closer to achieving a nuclear weapon and the election of a harder-line regime in Israel – have not been able to rattle the oil markets as they have in the past. Instead, the market seems to shrug away each new possible threat as it keeps scanning the horizon for the return of the long-lost American motorist.

AAA's Daily Fuel Gauge Report is the most comprehensive retail gasoline survey available.  Everyday over 60,000 self-serve stations are surveyed.

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