AAA: Gas prices fall into autumn

Autumn officially began on September 23, and for motorists across the country gas prices are falling like leaves.  The national average price for regular unleaded gas dropped to $3.34 per gallon Friday, down two cents in the past week and the lowest price since Valentine’s Day.  Friday’s average is nine cents less than one month ago and nine cents less than one year ago.

The latest round of U.S. sanctions on Russia and the recent eruption of violence in Libya leading to the shutdown of oil fields remain of interest to commodities market watchers.  The U.S. began air strikes in Syria this week, targeting refineries.  Despite these geopolitical tensions, global oil prices continue to test multi-year lows.  The U.S. dollar hit a four-year high this week, and while the oil/dollar relationship hasn’t been nearly as strong this year and years past, the multi-year highs will likely weigh on oil value.  Typically, a higher U.S. dollar depresses oil, with foreign investors getting less oil for their money.  Crude oil settled at $93.54, up $1 from last week.

The Energy Information Administration (EIA) noted in its weekly report that crude oil inventories declined 4.3 million barrels, much larger than expected, to 357 million barrels.  Gasoline stocks were up by 800,000 barrels to 210.3 million barrels.  Demand figures in the EIA report were fairly flat.  Gasoline demand rose just 74,000 barrels per day (bpd) to 8.781 million bpd, over 100,000 bpd lower for mid-September figures in the last two years.

“Lower gas prices are welcome news, as the national average gas price drops to lows not seen since February,” said Martha M. Meade, Manager of public and Government Affairs for AAA Mid-Atlantic.  “Demand is down, crude oil is down, supplies are good, we’re using less-expensive winter blend gasoline, and barring any unforeseen circumstances, AAA expects prices to continue to inch downward in the weeks to come.”

Two weeks past the start of the seasonal fuel switch in many parts of the country, the national average continues to decline.  During the transition to this less expensive winter-blended gasoline and barring an unexpected disruption to production or distribution, the national average often posts steady seasonal declines.   AAA expects the national average to fall another 10-20 cents by the end of October.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)