Dec. 19 (UPI) — A decline in gasoline demand during the winter months means U.S. motorists should see gas prices inch lower, but only relatively speaking, market reports find.
Motor club AAA lists a national average retail price of $2.41 for a gallon of regular unleaded gasoline as of Tuesday. That’s down a fraction of a percent from Monday and 5 percent, or 13 cents per gallon, less than one month ago.
Federal data show total U.S. gasoline inventories increased 5.7 million barrels last week, which means demand is moderating somewhat. According to a weekly retail market report from AAA, that means the price at the pump should continue to slide as the holidays approach.
“As long as demand for gasoline continues to weaken, gasoline inventories will continue growing and it’ll be the gift that keeps on giving,” added Patrick DeHaan, a senior market analyst for GasBuddy.
Adding to the declining trend, U.S. refineries switch late in the year to a winter blend of gasoline, which is less expensive to make because more steps are needed with the summer blend to prevent excessive evaporation. As a result, the summer blend improves gas mileage, however.
Gas prices are at their lowest price in more than 100 days, but only less expensive in relative terms. The average price for a gallon of gas is about 20 cents more than this time last year and about 40 cents higher than two years ago.
Nevertheless, AAA said it expects more than 97 million people will hit the road for the upcoming holiday season in the United States, suggesting the relative increase in gas prices isn’t doing much to deter travel plans.
By region, the West Coast remains the most expensive market in the country, though prices are moderating because of a surge in gasoline production. California has the highest average price in the Lower 48 at $3.09 per gallon.
The Great Lakes market is the most volatile and Ohio last week saw the average price for gas drop about 4.5 percent, or 10 cents per gallon, to $2.24 per gallon. AAA said a build in gasoline inventories is helping with the decline in retail prices.
