Crude oil prices dropped below $70/liquid barrel (bbl) at the end of last week in reaction to concerns about the delta variant, growing COVID case numbers and the possibility of potential lockdowns, according to data released by AAA. While crude is a little cheaper, gas prices are still positioned to remain high in August.
Today’s national average is $3.19. That is the most expensive gas price average of the year as well as $1.02 more than a year ago, a nickel more than a month ago and two cents more than a week ago. Pump prices fluctuated across the county last week with states seeing as much as a nine-cent jump to a seven-cent decrease. The variation in prices is partly attributed to the U.S. seeing an increase in demand and decrease in stocks, according to the Energy Information Administration (EIA).
“We continue to see very robust gasoline demand for the peak summer driving season,” said Jeanette McGee, AAA spokesperson. “The latest demand rate was 2% higher than the same time period in 2019, while gasoline stocks are about 1% below.”
August can be a busy month at the pump with school starting and others taking last minute summer trips. AAA offers these daily driving tips to help save on gas:
- Slow down and drive the speed limit. On the highway, aerodynamic drag causes fuel economy to drop off significantly as speeds increase above 50 mph.
- Avoid extended idling to warm up the engine. It is unnecessary and wastes fuel.
- When approaching a red light or stop sign, take your foot off the gas early and allow your car to coast down to a slower speed until it is time to brake.
- Accelerate smoothly with light to moderate throttle. This allows the automatic transmission to upshift into higher gears sooner, reducing engine rpm and saving fuel.
- The nation’s top 10 largest changes: Michigan (+9 cents), Colorado (+7 cents), Delaware (−7 cents), Ohio (+6 cents), Florida (+6 cents), Kentucky (+4 cents), Indiana (−4 cents), South Dakota (+3 cents), Nevada (+3 cents) and Maryland (−3 cents).
- The nation’s top 10 least expensive markets: Mississippi ($2.79), Louisiana ($2.82), Texas ($2.84), Alabama ($2.84), Missouri ($2.86), Arkansas ($2.87), South Carolina ($2.88), Oklahoma ($2.88), Tennessee ($2.89) and Kansas ($2.92).
Oil Market Dynamics
At the close of Friday’s formal trading session, West Texas Intermediate (WTI) oil decreased by 81 cents to settle at $68.28. A stronger dollar and market concern about the impact of new coronavirus infections on crude demand pushed prices lower at the end of last week. Crude prices also declined after the EIA’s latest report showed that total domestic crude stocks increased by 3.6 million bbl to 439.2 million bbl.
For this week, crude prices could decrease further if the market continues to worry that crude demand will decline as restrictions are imposed to halt transmission of COVID-19.