Gas demand and prices take a tumble.
With summer coming to a close, pump prices are decreasing. On Aug. 20, the national average price of gas rang in at $2.84, three cents less than at the start of August, two cents less than the previous Monday and 50 cents more than this time last year, accoriding to AAA.
“Compared to July, consumer demand for gasoline is weaning and prices are following suit,” said Jeanette Casselano, AAA spokesperson. “The national average is expected to keep moving lower, especially with the switchover to lower grade gasoline in September.”
AAA pointed out that September brings winter-blend gasoline, which is less expensive to produce.
Hawaii ($3.76) has the most expensive gas, while Michigan (-10 cents) saw the biggest weekly decline.
Friday on the NYMEX, WTI increased 45 cents to $65.91. The oil price gains were due to a softening dollar. Earlier in the week prices had fallen after the EIA reported that domestic crude oil inventories grew by 6.8 million bbl last week. AAA noted the higher than usual growth in crude inventories surprised market observers and raised concerns that summer demand may be waning.
At 414.2 million bbl, crude inventories in the U.S. are about 52 million bbl lower than they were at this point last summer, which has contributed to higher gas prices this summer, AAA reported.
Domestic crude production topped 10.9 million b/d and imports grew to just over 9 million b/d, which caused the uptick in total crude inventories last week. If these trends continue, AAA predicted that crude inventories may show more growth, which would result in lower domestic crude prices.