WASHINGTON, Sept. 15 (UPI) — A weak crude oil market and lower expected U.S. consumer demand for gasoline this autumn are expected to keep prices at the pump lower, motor club AAA said.
AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.32 for Tuesday, about 3 percent less than one week ago and 13 percent less than this date in August.
The motor club said in a weekly status report the national average price for gasoline has fallen for 29 straight days. Three states — Alabama, Mississippi and South Carolina — report a state-wide average below the $2-per-gallon mark.
Demand for gasoline wanes after the Labor Day holiday weekend in the United States and, by Wednesday, refineries start making a winter-blend of gasoline, which, because of fewer environmental safeguards, is cheaper to produce.
Analysis emailed from price watchdog website GasBuddy.com finds the switch to winter gasoline could translate to savings of up to 10 to 25 cents per gallon in the medium-term. The swift decline in prices leading up to Wednesday is already faster than GasBuddy analysts predicted.
“Barring any unexpected disruptions in supply or spikes in the price of crude oil, the national average is expected to keep moving lower as we head into the fall,” AAA said in its report.
AAA said the low price of crude oil, down more than 50 percent from last year, translates to a de facto stimulus for most consumers. Unless there are major disruptions, like the August outage at the BP refinery in Indiana, consumers will continue to benefit from the weak crude oil market.
“The combination of lower production and higher demand is reportedly contributing to the sentiment that a bullish market could be on the longer-term horizon,” the motor club said. “The price of West Texas Intermediate crude oil, the traditional U.S. benchmark, is expected to remain relatively low as seasonal refinery maintenance gets underway and demand for gasoline decreases as we enter the fall.”
The national average price for Tuesday is 31 percent, or about $1, lower than this date in 2014.
