Gas prices in the US are falling

The Associated Press

The national average for gas prices on Monday stood around $3.44, according to AAA.
Industry analysts point to a blend of lackluster demand and strong supply — as well as relatively mild oil prices worldwide.
Today’s falling gas prices, explained.
There are a few factors contributing to today’s falling gas prices.
Patrick De Haan, head of petroleum analysis at GasBuddy, noted that gas prices typically ease in early summer because of refinery capacity.
“Really, what we’re seeing right now with (declining) gasoline prices … has been driven primarily by seasonal and predictable economics,” he said.
While gas prices nationwide are collectively falling, some states always have cheaper averages than others, due to factors ranging from nearby refinery supply to local fuel requirements.
Meanwhile, California, Hawaii and Washington had the highest average prices on Monday — at about $4.93, $4.75 and $4.41 per gallon, respectively.

NEGATIVE

According to AP, gas prices are once again declining nationwide. s. drivers who are now paying a little less to fill up their tanks, providing some relief.

According to AAA, the country’s average gas price on Monday was approximately $3.44. That represents the biggest one-week decline the motor club has seen so far in 2024, down roughly 9 cents from a week ago. The average on Monday was also higher by over 14 cents over the same period last year and by more than 19 cents over the previous month.

Industry analysts attribute the recent decline in gas prices to a combination of robust supply and weak demand as well as generally low oil prices.

What you need to know is summarized here.

An explanation of the current decline in gas prices.

The current decline in gas prices is caused by several factors. To begin with, fewer people might be driving.

Speaking to trends from the previous year and possible aftereffects of the COVID-19 pandemic, AAA spokesman Andrew Gross said, “Demand is just kind of shallow.”. Demand would typically start to increase in the summer after Memorial Day, prior to the pandemic. And it’s simply not visible to us anymore. “.

The Energy Information Administration released data last week indicating that U.S. s. The daily demand for gasoline dropped to roughly 8.94 million barrels. Even so, Gross pointed out that prior to the pandemic, consumption might have been closer to 10 million barrels per day at this time of year.

Experts observe that in addition to the effects of the pandemic, many Americans may have changed their driving habits as a result of high gas prices that followed Russia’s invasion of Ukraine in 2022 and ongoing inflation. According to Gross, there may be additional contributing factors, such as the rise in the number of electric and fuel-efficient cars on the road today.

Seasonality still plays a part in this. Because of refinery capacity, gas prices usually decrease in the early summer, according to Patrick De Haan, head of petroleum analysis at GasBuddy. He stated that many of the factors that drove up prices in the late winter and early spring, especially refinery maintenance, are no longer in play at this time of year.

Refinery utilization or output increases across the country when maintenance is completed, which leads to an increase in supply, according to De Haan. And this year’s “bit more noticeable” drop in prices is the result of a stronger supply and a weaker demand. He went on to say that U. s. Refinery utilization has increased to some of its highest points since the pandemic.

In addition, the Biden administration declared last month that it would be discharging 1 million barrels of gasoline, or roughly 42 million gallons, from a reserve located in the Northeast in an effort to bring down gas prices for the summer. Nevertheless, according to De Haan, such action has minimal national impact—42 million gallons is equivalent to less than three hours of U.S. s. everyday amount of gas used.

In actuality, the current trend of declining gas prices dot. has been mostly influenced by seasonal and dependable economic factors,” he stated.

What about the cost of oil?

Consultants also mention the expense of cooling oil. Crude oil is the primary component of gasoline, so its price at the pump is heavily influenced by it.

crude oil known as West Texas Intermediate, the U. S. benchmark, closed at less than $78 a barrel on Monday after remaining in the mid-$70s a barrel for several weeks. While noting that the price of crude usually needs to rise above $80 in order to increase pressure on pump prices, Gross said that this is “not a bad place for it to be.”.

Because oil prices are influenced by a variety of global factors, they can be unpredictable and volatile. This includes OPEC and its allies’ production reductions, which have historically raised energy costs.

A timeline for the restoration of some production was included in the announcement by OPEC+, which is why the price of oil “likely had somewhat of a bearish reaction.” The alliance had previously announced plans to extend three separate sets of cuts totaling 5 point eight million barrels per day.

Is it possible for prices to rise again?

One can never guarantee the future. Nonetheless, according to both Gross and De Haan, prices may continue to decline if there are no significant unforeseen disruptions.

Experts pay close attention to hurricane threats during this time of year because they have the potential to cause major damage and force refineries to shut down.

According to Gross, “prices move on fear.”. In the United States. S. He continued by saying that refineries may scale back operations out of caution even if the hurricane never makes landfall. Concerns increase particularly once a hurricane enters the Gulf of Mexico. Impacts may differ by area as well.

Analysts like De Haan anticipate that the national average for gasoline prices this summer will remain between $3.35 and $3.70 per gallon, unless something unexpected happens. He stated that we might witness a national average of less than $3 for gas in late October or early November, as prices usually decrease even further in the fall.

Which states currently have the cheapest gas prices?

Although gas prices are generally declining across the country, certain states consistently have lower average gas prices than others because of a variety of factors, such as the proximity of a refinery and local fuel requirements.

According to AAA data as of Monday, Mississippi had the lowest average gas price at roughly $2.94 per gallon, followed by Oklahoma at $2.95 and Arkansas at slightly less than $2.97.

On Monday, the states with the highest average prices were California, Hawaii, and Washington, with prices per gallon of roughly $4.93, $4.75, and $4.41, respectively.

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