AAA: Gas prices stabilizing with start of summer
The national average price of gas reached a new 2016 high last weekend, but has dropped by four cents in the last week. Today’s national average of $2.34 per gallon has moved higher eight cents per gallon on the month. Although pump prices have increased over the past month, consumers continue to benefit from yearly savings and prices are down 46 cents per gallon compared to a year ago.
“Gas prices in the region are within pennies of where they were at the beginning of June,” said Martha Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Prices may fluctuate on the heels of news related to global oil supply and the weakened U.S. dollar, which could have a major impact on what drivers pay for gasoline this summer.”
At the close of Friday’s formal trading session on the NYMEX, WTI closed down $1.09 to settle at $47.98 per barrel. Since reaching a 2016 high of $51.23 last week (6/8), WTI crude oil has stayed below $50, reaching lows not seen in more than a month. Prior to this week’s decline, the cost of crude oil has moved higher over the past few weeks, which has made gasoline more expensive to start the summer driving season.
Since early April, the cost of crude oil has increased by more than $13 per barrel to the highest levels since 2015. With all other factors being equal, a $1 per barrel change in the price of crude oil can increase gas prices by 2.4 cents per gallon.
Gasoline demand remains on target to reach new highs during this year’s summer driving season, due to the cheapest gas prices in over a decade and a relatively stable economy. The Energy Information Administration’s (EIA) weekly report showed that gasoline supplies reached 9.8 million barrels per day or 194,000 barrels per day higher than the previous week. So far in 2016, gasoline supplies are 4.2 percent higher versus 2015, according to the EIA.