WASHINGTON, Sept. 1 (UPI) — Bearish trends for crude oil prices and the resolution to problems at a major U.S. refinery pushed gas prices lower at a hastened clip, motor club AAA said.
AAA reported a national average retail price for a gallon of regular unleaded gasoline for Tuesday at $2.46, down about eight tenths of a percent from the previous day and 5 percent less than the previous week.
AAA, in a weekly retail market report, said the persistent decline of crude oil prices and the resolution of maintenance issues at BP’s refinery in Whiting, Ind., is behind the swift pace of decline in gasoline prices.
“Despite the persistence of some regional refinery issues, average U.S. gas prices are falling at the fastest rates since December,” the motor club said.
An August outage at BP’s refinery, the sixth largest in the country, pushed gasoline prices in most Great Lakes states near the $3 per gallon mark. The Bawyay refinery in New Jersey, operated by Phillips 66, and the Delaware City refinery, operated by PBF Energy, was pressuring the East Coast retail market, though prices at the pump regionally are now below the national average.
“Barring any major supply disruptions consumers remain poised to pay the lowest national average for the holiday weekend in 11 years,” AAA said.
AAA said a strong U.S. economy, fueled in part by a strong labor market, and low gasoline prices means consumers have more disposable income. The motor club said most consumers may feel cautious, however, and conserve cash to pay off debt, which could keep would-be travelers at home during the upcoming Labor Day holiday weekend.
In the crude oil market, AAA finds bearish sentiments remain despite a rally late last week. Crude oil prices started September in the red amid concerns about the health of the Chinese economy, which should keep the global market skewed toward the supply side.
Retail price watcher GasBuddy.com finds most of the steam from last week’s crude oil price rally is lost.
“With refinery maintenance season on the horizon, it’s likely crude oil will continue to face significant headwinds,” it said in a weekly emailed report. “During maintenance at refiners, less crude oil is processed, leading to higher oil supply.”