AAA: Gas prices hit 12-year July low

Gas prices have fallen to the lowest mark for this time of year since 2004, according to AAA, sitting at $2.17 per gallon nationally, and $1.97 per gallon in Virginia.

A handful of stations in the Waynesboro area were at $1.79 on Sunday.

“Gas prices have once again dropped below $2 per gallon in many parts of the country including right here in the Mid-Atlantic region,” said Martha Mitchell Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “Lower gas prices are a bonus for drivers anytime of the year and even more so for those planning a summer road trip this season.”

Gas prices continue to drop in most parts of the country due to abundant fuel supplies and declining crude oil costs. WTI oil prices have dipped below $45 per barrel over the past couple of weeks to the lowest levels since late April. Oil continues to drop due to the potential for steady production and abundant supplies.

Many analysts have predicted that oil prices could drop even further later this year, which would likely lead to lower gas prices. At the close of Friday’s formal trading session on the NYMEX, WTI was down 56 cents to settle at $44.19 per barrel.

Gas prices likely will remain relatively low compared to recent years for the remainder of the summer. U.S. crude oil supplies are about 13 percent higher than a year ago, while gasoline stocks have increased to 240 million barrels as refineries produce significant quantities of fuel. This is the highest ever mark for gasoline supplies during the month of July, according to Department of Energy records.

Despite paying the lowest seasonal prices in 12 years, there is always the possibility that unexpected events could lead to higher prices later this summer. For example, crude oil costs could rise due to disruptions in supply, stronger than expected economic growth or geopolitical tensions overseas. In addition, regional prices could increase due to refinery problems, production cuts, stronger than anticipated demand or hurricanes that impact distribution and production.