Transportation
11:15 am
Fri July 29, 2011

Gas Price Surge Slows As Oil Firms Announce Big Profits

For the past few weeks, gas prices have been ticking up by between a nickel and a dime a gallon. But the latest price report from AAA shows the rate of increase may be slowing. The average price of regular unleaded rose by only 1.7 cents last week.

A gallon of gas in Austin is an average of $3.602 today. A week ago it was selling at $3.585. Still a lot more than what we were paying a year ago, when regular unleaded was $2.563 per gallon.

The Texas average today is $3.626 a gallon, and the national average for regular unleaded is $3.710.

The most expensive gas in the country today is in Hawaii ($4.093/gallon) and Alaska ($4.021/gallon), followed by Connecticut ($4.055/gallon) and New York ($3.966/gallon).

Perhaps no big surprise then to see major oil companies reporting massive quarterly profits.

Exxon Mobile Corp. reported $10.6 billion dollars in second quarter profits yesterday, its strongest quarter since 2008, when oil prices were surging and gasoline prices were breaking records.

Royal Dutch Shell announced yesterday that it earned $8.7 billion in profits last quarter. That’s almost twice what it earned in the same quarter last year.  

But whether that growth in profits can be sustained for the rest of the year is uncertain, according to a report in the New York Times.

Growth in oil company profits for the rest of the year is uncertain, given that oil and gas prices are strongly tied to the health of the global economy. Demand in the United States for diesel, gasoline and other petroleum products has eased in recent months after starting the year strongly, and the growth in Chinese oil demand has slowed somewhat.

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