AAA: Gas prices falling again

Motorists’ spirits are bright across most of the country as stable, and in some areas somewhat lower, gas pump prices take hold in time for the Christmas and New Year’s holidays.

This week the national gas price average dropped three cents to $3.22 per gallon Friday, a penny more expensive than one month ago and mirroring the same price as this time last year.  With less than two weeks remaining in 2013, the national average gas price remains four cents above the low for the year, which was $3.18 on November 12.

National pump prices registered a 2012 low of $3.22 on December 20, while the price during the second half of 2011 bottomed at $3.21 on December 21.

“Prices at the pump continue to stabilize and even retreat in parts of the country as nearly 86 million Americans plan to take to the roadways for the Christmas and New Year’s holidays,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Resolved production concerns in the Gulf Coast and limited seasonal demand have both contributed to falling prices.  The national average is on par with last year and AAA anticipates prices will continue to trickle down through the end of the year, barring unforeseen circumstances.”

West Texas Intermediate (WTI) crude oil began a ninth consecutive week below $100 per barrel.  WTI prices made a run back toward the triple-digit threshold this week, boosted by a positive outlook for fuel demand in the United States, the world’s largest oil consumer.  Crude oil was headed toward a two percent gain by mid-week after U.S. crude stockpiles fell, while the U.S. Federal Reserve’s decision to start winding down its bond-buying program supported the view that the world’s biggest economy is on the path to recovery.  The commodity settled at $99.32 at Friday’s close, up nearly three percent on the week.

In its weekly report, the Energy Information Administration (EIA) data showed crude oil stockpiles saw a 2.9 million barrel drop to 372.3 million barrels, this after two weeks of large draws.  Gasoline inventories climbed 1.3 million barrels to 220.5 million barrels.  Gasoline demand jumped by 668,000 barrels per day (bpd) to 9.016 million bpd, with some analysts calling it a “make-up” call after last week’s weak demand figure.  While that theory certainly has merit, a look at historical demand figures from the EIA shows that the second week in December typically sees some solid demand numbers.

AAA projects 94.5 million Americans will journey 50 miles or more from home during the year-end holiday season, an increase of 0.6 percent from the 94 million people who traveled last year. This upward trend marks the fifth consecutive year of increases and the highest travel volume recorded for the season.  Automobile travel remains the dominant mode of transportation, with approximately 91 percent of travelers or 85.8 million people plan to travel by automobile during the year-end holidays. This is a 0.9 percent increase over the 85.1 million people who traveled by auto last year.  The year-end holiday period is defined as Saturday, December 21 to Wednesday, January 1.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)