AAA: Gas prices continue to fall

The national average price of gasoline has fallen 13 of 16 days (through Friday) since Thanksgiving. This follows a streak of 15 consecutive daily increases leading up to the holiday.

This week the national gas price average dropped a penny to $3.25 cents per gallon Friday, six cents more expensive than one month ago and remains five cents less than the same date last year.  While the 130-day streak (through Friday) of year-over-year discounts continues, the yearly savings is at its narrowest mark since early August.

“Like most of the Mid-Atlantic region, gas prices have frozen somewhat over the past week,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Lingering effects from maintenance at Gulf Coast refineries have resulted in pump price stabilization in many areas throughout the region. However, a stronger economy, both domestically and overseas, has put upward pressure on crude oil prices.  These factors have created a mixed bag at the pump, a trend that may very well continue through the end of the year.”

Underlying the recent volatility in gas prices has been the price of West Texas Intermediate (WTI) crude oil.  After 15 straight weeks above $100 per barrel, WTI has remained below this threshold for eight consecutive weeks, even after gradually settling higher the past two weeks on positive economic news, including a rosier than expected job report.

A stronger economy – both domestically and overseas – puts upward pressure on crude oil prices as more robust economies are expected to use more oil.  After closing last week with the highest settlement since October ($92.72 per barrel), crude oil reached a high for the week of $98.75 on Wednesday.  However, the commodity closed at $96.60 at Friday’s close, down 1 percent on the week.

In its weekly report, the Energy Information Administration (EIA) data showed crude oil production continued to climb in the U.S. with total output climbing 64,000 barrels per day (bpd) to 8.075 million bpd, a 25-year high going back to October of 1988.  As a result, crude oil imports saw a sharp drop of nearly 1 million barrels to 6.862 million bpd, a low not seen since early 1997.  The sharp decline in imports, along with an uptick in crude and other feedstock runs have led to the 10.6-million-bbl draw on crude oil inventories, pushing totals down to 375.2 million barrels.

Gasoline inventories climbed by more than 6.7-million barrels to 219.1 million barrels and could approach 230-million or 240-million barrels this winter.  The weak demand figures that were expected to show up perhaps a bit earlier this fall have started to grab hold with gasoline demand falling by 525,000 bpd to 8.348 million bpd. Those types of demand figures are common in the winter, with last week’s demand figures the lowest since January.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)