Gas prices have dropped in most areas within the Mid-Atlantic region, including Virginia (down four cents since last week).
With comparable gas prices to last summer, consumers may feel encouraged to drive more, potentially leading to an increase in demand for gasoline, which could help dip into the supply levels.
At $2.30, today’s national gas price average is four cents cheaper today than it was on this day one year ago. The national price drop is due to an unexpected buildup of crude oil combined with ongoing high gasoline production runs, an increase in gasoline stocks and a drop in gasoline demand.
If refiners continue to produce record amounts of gasoline and oversupply the market, consumers will reap the benefit and see slight fluctuations in gasoline prices (+/- a few cents) in coming weeks.
At the close of NYMEX trading Friday, WTI crude oil decreased $1.04 on the week to settle at $44.74. The market continues to see a substantial glut in crude inventories, resulting in high production rates putting downward pressure on prices per barrel. While OPEC nations continue adhering to their oil productions cuts, the U.S. continues to feed crude into the market at an impressive pace, leading to more gasoline production.
“A continued oversupply of crude along with a less than expected demand for gasoline is showing local drivers prices close to, if not lower than, where they were a month ago,” said Tammy Arnette, Senior Public Affairs Specialist for AAA Mid-Atlantic. “Price drops in the Mid-Atlantic are reflecting the national trend, and as the summer driving season zooms ahead, U.S. drivers may see gas price drops continue into July and August.”
The EIA Short Term Energy Outlook reports that for the 2017 summer driving season (April–September), U.S. regular gasoline retail prices are forecast to average $2.46 per gallon compared to $2.23 per gallon last summer. The higher forecast gasoline price is primarily the result of a higher forecast crude oil price.
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