Oil prices continued to increase last week as investor optimism about the economic recovery drove prices higher coupled with momentum from a weakened U.S. dollar. Better than forecast earnings for Citigroup Inc. and Google Inc. eased investor concern about the U.S. borrowing limit, thus pushing oil prices to close Friday at $97.49 a barrel on the New York Mercantile Exchange—$1.29 more than the week prior.
However, it was concerns about the national debt situation and U.S. credit rating that decreased the value of the dollar and helped keep oil prices elevated. Investors remain positive the U.S. economy will start to rebound despite an increased unemployment rate, decreased fuel demand, and low consumer sentiment. Consumer sentiment, which measures how consumers view their personal finances and employment conditions, fell to its lowest level since March of 2009 to 63.8 in early July from 71.5 in June, according to a Reuters/University of Michigan report.
Total U.S. fuel demand is down .04 percent to 18.9 million barrels a day over the past four weeks and is down 1.4 percent from the same period last year, according to the Department of Energy. Gas consumption is down 1 percent to 9.23 million barrels a day from the same period, a .09 percent decrease year-over-year.
"Despite negative news about the job market and consumer sentiment, investors are seemingly optimistic the U.S. economy will start to pick up, a statement made for quite some time with no solid data to support the claims," said Jessica Brady, spokesperson, AAA Auto Club South. "The high unemployment rate, increased oil and gas prices, along with a volatile stock market have consumers on edge. Oil and gas prices are expected to increase again this week on speculation the Federal Reserve may take action this week to help stimulate the economy."
The national average price of unleaded regular gasoline is $3.67 a gallon, 5 cents more than last week. Florida’s average price of $3.66 and Tennessee’s average price of $3.53 both reflect a 6-cent increase from last week. While Georgia’s average price of $3.66 is 9 cents more than last week, respectively.