AAA: Gas prices continue decline

AAA LogoMotorists have paid over $3.00 for a gallon of gasoline for more than 1,000 consecutive days, sometimes inching closer to $4.00 per gallon, which is why recent gas price declines come as welcome news when filling up at the pump.  The national average price at the pump has fallen for 26 straight days (through Friday), which is the longest streak in 2013.  Friday’s national average price for regular unleaded gasoline dropped to $3.42 per gallon, down seven cents from a week ago, down 13 cents from month ago prices and 38 cents less than a year ago.  On July 18 American motorists faced this year’s largest year-over-year premium at the pump with an average of more than 26 cents per gallon. Ten weeks later on September 27 drivers enjoyed a more than 38-cent discount compared to the same date in 2012.

Like gas prices, crude oil has also been on the decline in recent days.  The commodity saw a five-day losing streak throughWednesday, closing at $102.66, the lowest closing price since July 3.  Oil prices rebounded slightly Thursday as data showed the number of Americans filing for unemployment benefits fell 5,000 last week, as well as data that showed the U.S. economy grew 2.5 percent during the second quarter.  Crude oil prices have fallen nearly seven percent since closing at a two-year high of $110.53 on September 6.  Since then, the international community continues to move toward more diplomatic discussions over weapons of mass destruction in Iran and Syria, which dampens the geopolitical risk premium to oil prices.  Meanwhile, Libyan crude is again flowing to global markets, and Saudi Arabia’s oil minister said this week that the oil markets are well supplied at favorable prices.  Crude oil settled at $102.87 Friday, down nearly two percent on the week.

In its weekly report, the Energy Information Administration (EIA) data showed crude oil stocks grew by 2.6 million barrels to 358.3 million barrels, contrary to the 1 million barrel draw the industry had been expecting.  Gasoline stocks saw a 200,000 barrel build to 216.2 million barrels.  Gasoline demand pulled back a bit, almost 200,000 barrels per day (bpd), but the 8.846 million bpd demand figure is considered solid for late September.

“Motorists continue to see relief at the gas pumps, a trend which should continue through the remainder of the year,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “Barring a hurricane or other unexpected disruption to gasoline production and distribution, AAA expects that retail prices will continue lower in the coming months, as sufficient supplies, flat demand and cheaper winter-blend gasoline mean motorists are likely to pay less to fill their tanks.

Like autumn leaves, gas prices are likely to continue to fall in the weeks and months ahead.  Geopolitical tensions have eased in the Middle East, the Atlantic hurricane season has been uneventful, gas stations have switched to less-expensive winter-blended gasoline and demand should remain flat ahead until holiday travel begins at Thanksgiving.  This creates a “perfect storm” for falling prices at the pump.

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

9/29/13

Week Ago

Year Ago

National

$3.41

$3.48

$3.78

Virginia

$3.17

$3.24

$3.62

Charlottesville

$3.12

$3.19

$3.59

Norfolk Area

$3.18

$3.24

$3.58

Richmond

$3.10

$3.18

$3.59

Roanoke

$3.14

$3.19

$3.56

Crude Oil

$102.87 per barrel (at Friday’s close)

$104.75 per barrel (9/20/13)

$91.85

per barrel

(9/27/12)

 

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