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Florida gas prices declined 5 cents last week. The state average on Sunday was $3.36 per gallon. That’s the lowest daily average price since late April, according to data released by AAA on Monday.
“Pump prices have been under pressure during the past month due to falling oil prices,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “However, oil prices could strengthen this week. Over the weekend, OPEC agreed on another round of oil production cuts. It’s unclear how much of an effect this will have on fuel prices, but if oil prices rise significantly, drivers would likely see higher prices at the pump.”
This is the latest in several rounds of production cuts. Last year, OPEC agreed to cut oil production by 2 million barrels per day.
In the news: Fearing Economic ‘Slowdown,’ Oil Drillers Shut Down More Rigs In Any Week Since 2021
In April, the cartel surprised the market by cutting an additional 1.16 million daily barrels.
This caused a brief jump in oil prices, which cooled through May. OPEC hopes this additional 1 million b/d cut will send oil prices higher again.
Overnight, the U.S. oil price traded at above $72 per barrel. That’s only about a dollar more than Friday’s closing price, within the same range that oil prices have been in during the past month.
Regional Prices
- Most expensive metro markets – West Palm Beach ($3.60), Naples ($3.48), Miami ($3.48)
- Least expensive metro markets – Crestview-Fort Walton Beach ($3.20), Panama City ($3.29), Pensacola ($3.30)
US Oil Drillers Slowdown
Oil drillers in the U.S. cut the number of active rigs by the largest weekly amount in nearly two years, as an ongoing slowdown in the industry continues, Reuters reported on Friday.
The number of active oil and gas rigs declined by 15 this week to 696, the largest single-week drop since September 2021 and bringing the number of active rigs to its lowest since April 2022, the outlet reported, citing data from energy analytics and data firm Baker Hughes.
Last week’s plunge is the fifth straight week of declines in the number of active drill sites — May saw the largest monthly slide in oil rigs since June 2020 — bringing the total number of shutdowns to 59 since the slide began.
Compared to the same time last year, the overall number of rigs is down 4%, Baker Hughes reported. Drillers have been pulling back in recent weeks thanks in part to declining oil prices due to investors’ fears of an upcoming economic downturn , combined with higher input costs, Reuters reported.
In the news: Despite Native American Push Back, Biden Issues 20-Year Oil Drilling Ban Near Indigenous Site
Prices have kept down in part due to a “slowdown in industrial demand, certainly on the Western side of the equation,” Doug King, CEO of British commodities trading firm RCMA Capital, told The Wall Street Journal.
All rigs shut down this week were oil rigs, bringing the total number of active oil rigs down to 555, while the number of active gas rigs held steady at 137, Reuters reported.
“Many (gas) drillers are eagerly eyeing the LNG (liquefied natural gas) demand boom expected over the next 30 months and are reluctant to cut productive capacity,” analysts at energy consulting firm EBW Analytics wrote in a note this week, according to Reuters.
The Biden administration on Friday imposed a 20-year pause on all new drilling within a 10-mile radius of a historical Native American site in New Mexico, although it allowed existing rigs to remain.
After oil and gas companies posted record breaking profits in 2022 — which drew repeated criticism from Biden — as prices soared following Russia’s invasion of Ukraine, some industry analysts expected larger energy firms to use these profits to buy out smaller firms, bolstering production for a future boom, even as they shut down rigs in the interim.
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