Oil supplies keep motorists in the black
KINGMAN - Despite the growing oil spill in the Gulf of Mexico, American motorists have continued to enjoy a five-week decline in gas prices, and Arizona is no exception.
Gas prices statewide have been falling steadily the last month, with the average down to $2.707 cents per gallon of unleaded Monday afternoon, a drop of nearly 18 cents from the prior month, and still trending downward.
In Kingman, Monday's average stood slightly higher at $2.778 per gallon, with individual station prices ranging as low as $2.65 in at least one location, according to AAA's Fuel Price Finder Web site. Kingman's fell in between its neighbors in Mohave County, which averaged $2.714 per gallon in Bullhead City and $2.801 in Lake Havasu City. Flagstaff continues to hold the state's highest gas prices, averaging $2.893 per gallon, while Tucson maintains the lowest at $2.588.
The drop in gas prices has come despite continued media attention paid toward the Deepwater Horizon disaster in the Gulf of Mexico, where a damaged British Petroleum oil rig has caused a gusher to leak tens of thousands of barrels of oil every day for the past two months, resulting in the largest spill in U.S. history.
According to AAA Arizona spokeswoman Michelle Donati, while the gusher may very well have a long-term effect on crude oil prices, the rig itself was an exploratory operation and was not being relied upon for the day-to-day oil supply.
"So that product wasn't immediately being counted on in the market," she said. "Given that supplies are healthy and demand isn't growing by leaps and bounds, the short-term impact was minimal."
While demand has risen slightly this year, buoyed by a good turnout on Memorial Day weekend, Donati said demand continues to lag behind pre-recession levels, even as the market remains relatively flush with oil and refined gasoline. In fact, supply is currently so plentiful that many Arizona gas stations are seeing something they haven't seen in years - a profit margin.
"Retail margins have been healthy for several weeks now, so whereas in the past retailers would take a hit on a gallon of gasoline, we've seen profit margins vary from 10 to 20 cents per gallon," she said.
"It's pretty substantial because normally we'll see numbers in the negative, in the red."