The national average for a gallon of gas dropped four cents since last week, despite growing gas demand. However, the price of oil has declined several dollars per barrel and is holding steady below $80, contributing to lower pump prices. As Labor Day approaches, gas demand and volatile oil prices, particularly during an active hurricane season, could limit how much lower prices descend in the weeks ahead.
“Although the national average did a U-turn this week, the road ahead could lead to higher prices,” said Andrew Gross, AAA spokesperson. “Ongoing concerns regarding potential storm activity could hinder falling pump prices this fall.”
According to new data from the Energy Information Administration (EIA), gas demand jumped from 8.85 to 8.91 million b/d last week. Meanwhile, total domestic gasoline stocks increased slightly from 216.2 to 217.6 million bbl. Although demand increased, growing stock levels contributed to pushing prices lower.
Today’s national average of $3.83 is 24 cents more than a month ago but five cents less than a year ago.
Since last Thursday, these 10 states have seen the largest decreases in their averages: Indiana (−13 cents), Iowa (−11 cents), Florida (−10 cents), Wisconsin (−10 cents), Michigan (−10 cents), Ohio (−9 cents), Minnesota (−9 cents), Kentucky (−7 cents), Nebraska (−6 cents) and Delaware (−6 cents).
The nation’s top 10 most expensive markets: California ($5.26), Washington ($5.06), Hawaii ($4.78), Oregon ($4.72), Alaska ($4.55), Nevada ($4.47), Utah ($4.22), Arizona ($4.25), Idaho ($4.12) and Illinois ($4.11).
Oil Market Dynamics
At the close of Wednesday’s formal trading session, WTI decreased by 75 cents to settle at $78.89. Oil prices have declined this week amid market concerns that an economic slowdown in China, the world’s largest importer of crude oil, could push global oil demand down, which could also lead to lower prices. The price of oil has declined despite the EIA reporting that total domestic commercial crude inventories decreased from 439.7 to 433.5 million bbl last week.
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