After a nine-day slide, West Texas Intermediate (WTI) crude oil futures settled higher Thursday, but still under $103 per barrel, which is good news for gas prices. The national average price for regular unleaded gasoline decreased to $3.63 per gallon Friday, down three cents from one week ago. Friday’saverage is one cent lower than one month ago and 11 cents higher than year ago prices.
Violence in Iraq continues to impact global oil prices, but as production in the south of the country remains unaffected, the fear of a disruption to supply has abated. More good news. Market watchers are keeping a close eye on the situation, but the risk premium that had pushed oil prices to 2014 highs has subsided in recent trading sessions. These elevated oil prices have meant stubbornly high pump prices for motorists, robbing them of the usual price break at the gas pump between Memorial Day and the Fourth of July.
All that is in the rear-view mirror now, as oil prices have eased retail gas prices have finally started to follow suit. Crude oil prices dropped below $104 per barrel this week. The commodity closed at $100.83 per barrel Friday, down nearly three percent on the week and the lowest settlement price in two months. Crude oil has settled above $100 every closing since May 12.
The Energy Information Administration (EIA) noted in its weekly report that U.S. crude oil stocks dropped 2.4 million barrels to 382.6 million barrels. Gasoline stocks increased by 0.6 million barrels to 214.3 million barrels. Gasoline demand dropped 233,000 barrels per day (bpd) to 8.935 million bpd last week and falls slightly short of a year ago. The current four-week average is also slightly behind of the same four weeks in 2013.
“Elevated oil prices have meant stubbornly high pump prices for motorists, robbing them of the usual price break at the gas pump between Memorial Day and July Fourth,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Recent eases in oil prices are slowly translating into lower prices at the pump and we may have seen prices hit their peak for summer barring any unforeseen circumstances.”
AAA predicted that drivers would pay relatively high prices this summer, ranging from $3.55 – $3.70 cents per gallon. The national average of gasoline at $3.63 per gallon is the lowest since April 11 and is even with 2011 gas prices for this date. WTI crude oil futures settled higher Thursday, but still under $103 per barrel, which is good news for gas prices.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
(at Friday’s close, 7/11/14)
(Thursday, 7/3/14 – market closed Friday, 7/4/14)