Prices at the gas pump continue to fall like autumn leaves across most of the country. The national average price for regular unleaded gasoline dropped to $3.32 per gallon Friday, down two cents in the past week and the least expensive daily average since February 12. Friday’s average is 11 cents less than one month ago and six cents less than one year ago.
Drivers paid the lowest September gas prices since 2010 with the monthly average at $3.39 per gallon, which was about 13 cents less than last year and 44 cents less expensive than 2012. This is the fourth consecutive year that gas prices have fallen in September. Gas prices typically decline in September as the busy driving season ends and because many stations begin selling less costly winter-blend gasoline on September 15. Also, for the second year in a row, consumers caught a break in September with no Atlantic hurricanes striking the U.S. coastline. September is the peak period for the Atlantic hurricane season, and hurricanes can cause gas prices to rise significantly by disrupting refineries, pipelines and oil production.
Geopolitical events remain front of mind for market watchers, but in recent months have not translated into upward pressure on global oil markets. Rather, poor demand growth from both the U.S. and China, the world’s two largest oil consumers, combined with healthy worldwide supplies were cited as some of the main reasons for the overreaching weakness seen over the last several weeks. In fact, crude oil traded below the $90 mark on Thursday for the first time since April 2013. But was Friday’s close of $89.74 per barrel that marked the first sub-$90 close in almost a year and a half, down more than four percent on the week.
The Energy Information Administration (EIA) noted in its weekly report that crude oil inventories slipped 1.4 million barrels to 356.6 million barrels. Gasoline stocks declined 1.8 million barrels to 208.5 million barrels. Gasoline demand trickled a bit lower to 8.66 million barrels per day (bpd) last week, and while the implied demand figures are not as weak as the post-Labor Day levels, demand has had trouble getting up off of the floor.
“American drivers will save some money at pumps as gas prices continue to fall,” said Jana L. Tidwell, Public Affairs Specialist for AAA Mid-Atlantic. “Gas prices could fall another 20 cents per gallon by the time families load up the car for Thanksgiving and the year-end holidays. In fact, if everything goes smoothly, many parts of the country could see sub-$3 per gallon gasoline this winter.”
AAA expects the national average price of gas could drop to $3.10 – $3.20 per gallon before the year ends, which could be the closest that the national average has come to $3 since 2010. Last year, the national average reached a low of $3.18 per gallon on Nov. 12. Gas prices typically decline from September through early winter due to declining demand as people drive less during colder months. While gas prices will not fall every day over that period, drivers should pay significantly lower prices in December than they are paying today. Barring any major disruptions in supply, drivers are expected to see some of the lowest autumn prices since 2010. The peak period for Atlantic hurricanes has passed, but it is still possible for a late-season hurricane to disrupt production before the year is over. In late October 2012 for example, Hurricane Sandy struck the Northeast, which caused gas prices to rise significantly in New York, New Jersey and Connecticut.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
| 10/5/14 | Week Ago
9/28/14 |
Year Ago
10/5/13 |
|
| National | $3.30 | $3.34 | $3.36 |
| Virginia | $3.11 | $3.13 | $3.15 |
| Charlottesville | $3.08 | $3.08 | $3.06 |
| Norfolk Area | $3.15 | $3.17 | $3.15 |
| Richmond | $3.03 | $3.07 | $3.09 |
| Roanoke | $3.06 | $3.07 | $3.06 |
| Crude Oil | $89.74
per barrel (at Friday’s close, 10/3/14) |
$93.54
per barrel (Friday 9/26/14 close) |
$103.31
per barrel (10/3/13) |
Share
Chris Graham
