Gas Glut Means Lower Pump Prices

Sep 24, 2013 7:45am

Morning Money Memo:

The weather is cooling down and so are gas prices. “The reality is that gasoline is very plentiful,” senior oil analyst Tom Kloza of gasbuddy.com says. “We’re about 30 cents-plus below where we were a year ago and we’re going to see lower prices in the fall.” The U.S. Energy Department says the price of regular unleaded gas has dropped another 5 cents a gallon nationwide in the past week. California is now the only state where drivers are paying more than $4 a gallon. “It’s not that expensive given where it was last year and the year before. You have to go back to 2010 to find numbers this cheap.”

Rising U.S. oil production is one reason for the strong supply of gasoline. Another is falling demand. More people are driving newer and more fuel efficient cars and light trucks. With an increase in auto sales, “the vehicle fleets are turning over at a faster rate, and new vehicles are coming in at 25 miles-per-gallon average,” Kloza tells ABC News.

BlackBerry has agreed to sell itself to a group led by the firm’s biggest shareholder. Fairfax will buy the struggling tech firm and pay $4.7 billion. That’s $9 a share. BlackBerry shares plunged Friday after the company announced huge financial losses and layoffs of more than 4,000 workers. BlackBerry hit almost $150 a share in June 2008: its peak price. This deal to take the Canadian company private involves buying shares at 94 percent below their peak price.

The stock market was down Monday. Futures fell slightly this morning. After reaching another record high last week, the Dow Jones Index closed down 50 points; its third-straight daily loss. Concerns about the economy and another fight on Capitol Hill over the budget could lead to more losses this week.

The financial information firm Sageworks says sales growth America’s private held companies has slowed down. According to the firm’s quarterly report, sales growth is up less than 4% this year after nearly double-digit sales growth in 2012 and 2011. Sageworks’ chairman Brian Hamilton calls this slowdown “troubling”, and the slowdown “does not bode well for the already inconsistent hiring and investment plans for these companies.”

Citigroup is the latest big bank to cut jobs in its mortgage processing department. About 1,000 positions will go. In recent months there has been a sharp decline in refinancings because mortgage rates have gone up.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow

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