WASHINGTON, Sept. 22 (UPI) — Continued weakness in crude oil markets and lower seasonal demand should keep U.S. consumer gasoline prices lower, industry forecasts said.
Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.28, down about 1 cent from Monday for the lowest price for this date since 2004.
The Labor Day holiday in the United States marks the end of the so-called summer driving season. Last week, refineries started switching to a winter blend of gasoline, which is cheaper to produce because of fewer environmental safeguards.
Brent crude oil prices, meanwhile, at around $48 per barrel are roughly 2.7 percent lower than at the start of September.
Patrick DeHaan, a petroleum analyst with retail price-watcher GasBuddy.com, said lingering pessimism in crude oil markets means gasoline prices should continue to fall through the end of the year.
“With much of the country now on winter gasoline, there is less pressure on prices during the upcoming fall maintenance season at the nation’s refineries,” he said in an emailed report. “I continue to believe that the national average will fall under $2 per gallon, perhaps even sooner than expected.”
In its market report, AAA said falling crude oil prices are contributing most to the expected decline in retail gasoline prices. Retail markets on the West Coast should stay behind the trend, however, because refineries have yet to switch gasoline blends.
AAA data show South Carolina has the lowest state average in the nation with $1.91 per gallon for Tuesday. Five states report an average price below the $2 per gallon mark. AAA had said most states should be at or near the $2 by the end of the year.
The U.S. Energy Information Administration expects gasoline prices to average $2.11 per gallon during the fourth quarter and $2.38 for full-year 2016, down 1.2 percent from the expected 2015 average.