While pump prices remain volatile, motorists could still enjoy cheaper gasoline this fall, if historic trends hold true.
Despite a jump following the weekend, average retail gasoline prices in Illinois have fallen 7.5 cents per gallon
in the past week, averaging $3.94 a gallon Sunday, according to the illinoisgasprices.com website, which relies on motorist reports.
This compares with the national average that has fallen 2.4 cents per gallon in the last week to $3.79.
"In the last few years, we've typically seen a seasonal downward trend at the gas pump as the cooler temperatures invade," said GasBuddy.com Senior Petroleum Analyst Patrick DeHaan. "We just haven't seen any sort of real decline at the pump yet this autumn."
The price of oil remained supported Tuesday by a report showing a rebound in U.S. manufacturing for the first time in four months.
In Robinson today, after prices dropped as low as about $3.56 a gallon for regular over the weekend, they were back up to between $3.72 and $3.74 a gallon today. Diesel was pumping for about $3.98 today locally.
That compares to $3.86 to $3.88 a gallon for regular a month ago, and $4.08 for diesel. A year ago, regular was going for $3.13 to $3.15 a gallon locally, which was close to the lowest price in the state at that time.
Today, the lowest gas prices in Illinois could be found at several locations along Interstate 57 in Salem, according to illinoisgasprices.com. Regular was as low as $3.55 a gallon there.
Price were slightly higher in the Terre Haute market today, with regular averaging $3.80 a gallon and mid-grade at $3.89, according to the AAA Fuel Gauge Report. That was down about 14 cents a gallon from a month ago. Prices in the Evansville market were averaging about a dime cheaper.
By early afternoon in Europe, benchmark oil for November delivery was up 18 cents to $92.66 a barrel in electronic trading on the New York Mercantile Exchange.
The contract closed up 29 cents at $92.48 in New York on Monday after a report showed U.S. manufacturing grew in September for the first time in four months.
In London, Brent crude, used to price international varieties of oil, was down 8 cents to $112.11 on the ICE Futures exchange.
Locally, Plains Marketing LP had crude at $85.50 Monday, compared to $88.25 a month ago.
"As there is still an oversupply of oil, prices are unlikely to make lasting gains for the time being," said a report from Commerzbank in Frankfurt.
Oil ended the third quarter with a slight gain as investors weighed whether the world economy could pull out of the doldrums. It marked a quiet finish to a quarter in which oil had a dramatic impact on prices at the gas pump and on some sectors of the stock market. Oil gained 8.5 percent during the third quarter, and is up 18.7 percent from the year low hit on June 28. Gasoline prices rose 14 percent to an average of $3.79 per gallon, a record for late September.
Traders will enter the final quarter of the year with many of the same questions that hung over the market for the last three months: Will world oil demand get weaker? Or will stimulus measures from central banks in the U.S., China, Europe and Japan boost economic growth and oil demand? And could tensions between Iran and the West lead to a war that could disrupt supplies?
Economies around the globe are using less oil than expected as they struggle to grow. When economies slow, demand for oil falls because people travel less and ship fewer goods. Meanwhile, supply has been ample thanks to big increases in production from the U.S. and elsewhere.
But two factors have kept oil prices relatively high: Economic stimulus programs from the world's central banks and fears that a military conflict with Iran could disrupt oil supplies.
Enthusiasm for stimulus measures briefly pushed oil over $100 for the only time during the quarter in mid-September. But the reality of the world's economic weakness seemed to settle in and oil fell about $7 per barrel in the past two weeks.
"We expect the focus to return to the deterioration in underlying economic and financial conditions that made the additional stimulus necessary in the first place," said Julian Jessop, chief global economist at Capital Economics in a report Friday.
Conditions in Spain are a reminder that Europe is still in financial crisis. Many think Spain will seek help from the European Central Bank after announcing a round of severe budget cuts on Thursday.
Tensions between Iran and the West over Iran's nuclear program have been heating up for months. Israeli Prime Minister Benjamin Netanyahu suggested this week that Iran could have enough enriched uranium to build a nuclear bomb by next summer. To some analysts, his speech suggested no military action is imminent.
The effect of high oil prices were reflected in the stock market during the quarter. Energy was the best performer of the 10 sectors in the S&P 500 stock index. Chevron Corp. shares hit an all-time high of $118.53 and Exxon Mobil Corp. shares reached $92.57, the highest level since May of 2008. But airline stocks had a rough quarter because jet fuel prices rose. Shares of United Continental Holdings Inc. and Delta Air Lines Inc., the nation's two biggest airlines, fell 20 percent and 16 percent, respectively.
And higher oil prices made trips to the gas station more expensive as the summer progressed. Drivers saw prices rise nearly 50 cents per gallon from early July to late September.
The national average retail price was $3.79 per gallon Friday, according to AAA, OPIS and Wright Express. That's down about a penny for the day, but it's 32 cents higher than this time last year and highest ever for this time of year.
The lowest point for crude oil and retail gasoline prices was at the beginning of the quarter, on July 2, when crude closed at $83.75 per barrel and drivers were paying $3.33 at the pump. Stimulus programs and refinery closures in the U.S. caused by technical problems and Hurricane Isaac pushed prices up from there. On Sept. 14, oil traded over $100 briefly before settling at its high for the quarter of $99 per barrel. Retail gasoline hit its high for the quarter that day too, at $3.87 per gallon.
The quarterly average prices for oil and gasoline were little changed from last year. The price at the pump averaged $3.64 per gallon, just 2 cents higher than last year's third quarter. The average was 7 cents lower than during this year's April to June quarter when gas hit its high for the year of $3.94.
Crude oil averaged $92.09 per gallon, 3 percent higher on average than last year's third quarter.
Natural gas hit its high for the quarter - and the year - on Friday. Earlier in the year traders were concerned that a surplus from last year's warm winter and increased domestic production would fill up storage facilities and send prices toward zero. But a blistering hot summer increased demand for gas to generate electricity for cooling and forecasters predict a more normal winter.
Natural gas rose 2.3 cents to $3.32 per thousand cubic feet Friday. For the quarter, natural gas averaged $2.88 per thousand cubic feet, which was 29 percent lower than the average price for last year's third quarter, but 23 percent higher than the April-to-June period this year.