Gas prices have dropped for seven straight days ending a 12-day streak of escalating prices. The national average price for regular unleaded gasoline dropped to $3.65 per gallon Friday, a 2.5-cent drop in the past week. This current price is 11 cents more expensive than one month ago and 16 cents more expensive than the same day last year. The national average remains 14 cents lower than the peak price this year of $3.79 on February 27 and 46 cents below the all-time daily high of $4.11 per gallon on July 17, 2008.
It remains to be seen if this is a harbinger of better things to come at the self-serve gas kiosk, as the first two weeks of August approach. That’s when it seems everyone is on vacation before the kids head back to school as VMT (vehicle-miles-traveled) reaches its highest level of year and demand for motor fuels soars to its yearly zenith. Gas prices appear to have hit a summer-low of $3.47 on July 7, near the same date as the seasonal low price in recent years.
U.S. crude oil prices have slipped below $105 early Friday morning. Crude oil settled at $104.49 at Friday’s close. Production is currently at the highest rate since the final week of 1989, according to the U.S. Energy Information Administration (EIA). Several factors have contributed to oil’s recent high prices including reported production issues at the Irving’s Saint John Refinery in Canada that has a scheduled maintenance turnaround of October and continued tension in Egypt and the Middle East.
In its weekly report, the EIA is tracking the “steep decline in U.S. Commercial Crude inventories.” EIA data showed crude oil stocks saw a 2.8 million barrel draw that put total inventory at 364.2 million barrels. Inventories are now 15.9 million barrels below last year. Gasoline stocks dropped 1.4 million barrels to 222.7 million barrels. Gasoline demand is up from last week to 8.982 million barrels per day (bpd) further reflecting July’s recent history of demand “hiccups.” The four-week average demand level is a brisk 9.076 million bpd, compared with 8.802 million bpd last year.
“The decline of gas prices over the past seven days has offered motorists a small sign of relief,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Motorists are seeing some relief as a result of a slump in wholesale prices. It manifested itself in a 2.5-cent drop in retail gasoline prices across the country. It is occurring just as American families plan to put more miles on their odometers for their August vacations just before the new school year begins.”
Most regions across the country witnessed a welcome decline in wholesale gasoline prices this week and that should continue into next week, some energy analysts are soothsaying. The big drop in crude oil inventories will remain worrisome in weeks to come, as well as the drop in stocks of gasoline, which were down 1.4 million bbl last week, OPIS is reporting. The east coast and the gulf coast saw the “bulk of the losses.” So during the next week, all eyes will be on gasoline inventories on the east coast for telltale signs of trouble.
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