AAA: Gas prices down 28 cents since mid-February peak

AAA LogoMotorists across the country continue to feel relief at the pump as gas prices in every state are lower than one week ago.  The national average price for a gallon of regular unleaded gasoline dropped to $3.51 Friday.  This price is five cents less expensive than one week ago, 19 cents less than one month ago and 38 cents less than one year ago.

The national average has now fallen for 16 straight days and 45 of 51 days since the peak 2013 price to date of $3.79 on Feb. 27. In 2011 the national average for regular unleaded gasoline peaked at $3.98 on May 5. In 2012 the price peaked at $3.94 on April 5 and 6.

U.S. gasoline prices in April have continued to fall, not just because of weak demand data and signs of economic weakness but as oil prices have also moved sharply lower.  Crude oil started the week down $2 on Monday, after coming off a $2 loss the previous Friday, and continued a downward trend for much of the week.  Weak U.S. economic data, some strength in the U.S. dollar, and disappointing Chinese gross domestic product (GDP) data sent the commodity downward through mid-week.  Then crude oil snapped a six-day losing streak Thursday, after dropping to $85.61, a 2013 low.  A rise in jobless claims, weak economic news and a weaker dollar index helped give dollar-denominated oil prices a boost.  Though political uncertainty in the euro zone, where Italy failed to elect a president, may cap crude oil gains.  Crude oil settled at $88.01 Friday, down $3 (or nearly four percent) for the week.

In its weekly report, the Energy Information Administration (EIA) data showed crude oil stocks fell 1.2 million barrels to 387.6 million barrels.  Gasoline stocks fell 633,000 barrels to 221.7 million barrels.  EIA data showed a lackluster U.S. gasoline demand number of just 8.383-million barrels per day (bpd), down 94,000 bpd, a 16-year low and following a trend of year-on-year decreases that stretches back to early March.  Year-to-date gasoline consumption could soon move into the negative column.  At one point in the first quarter, EIA numbers suggested 2013 gasoline demand was running more than three percent above 2012, but that increment has been sliced to 0.7 percent and the last four weeks find demand measured nearly 300,000 bpd behind 2012.  The numbers are demonstrative enough to suggest that a significant slowdown in consumer driving is in progress when, by comparison, the second week of April produced gasoline demand numbers of 9.339 million bpd in 2008; 9.325 million bpd in 2010; and 9.181 million bpd in 2011.

“Prices at the pump continue to drop, a trend that could bring motorists relief well into summer,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “Lower gas prices are a typical springtime trend, however, this year the trend is occurring on a much earlier timetable with spring highs coming in late winter.  That said, analysts believe a seasonal low could come in June this year instead of July.”

Gasoline prices are expected to continue to fall for the remainder of April, a trend that could potentially last through most of the peak driving season (April through September) this year.  Crude oil prices continue to drop, which is typically the primary factor in determining gas prices.  However, weak demand and signs of global and domestic economic weakness will also weigh heavily on prices at the pump.  Barring any unforeseen situation – economic, political and/or weather-related incidents – gas prices should continue to drop.

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