The price for oil has dropped nearly $20 per barrel recently to the upper $60s, which has spurred the retreat for gas prices, according to AAA. The national average for a gallon of regular gasoline fell six cents since last week to hit $3.57.
“The oil market volatility is leading to lower prices,” said Andrew Gross, AAA spokesperson. “And we are also in a pre-summer driving season lull regarding domestic demand. These two factors should keep pump prices drifting lower for now.”
According to new data from the Energy Information Administration (EIA), gas demand decreased significantly from 9.51 to 8.62 million b/d last week. The drop in demand is more in line with what market observers expected last week. The estimate could be revised when EIA releases final demand measurements for May. Meanwhile, total domestic gasoline stocks increased by 1.8 million bbl to 222.9 million bbl. Lower demand, alongside an increase in stocks, has contributed to pushing pump prices lower. If demand remains low, drivers will likely continue to see pump prices decline.
Today’s national average of $3.57 is seven cents more than a month ago but 65 cents less than a year ago.
Since last Thursday, these 10 states have seen the largest decreases in their averages: Texas (-12 cents), Ohio (-11 cents), Michigan (-11 cents), Delaware (-11 cents), Tennessee (-10 cents), Indiana (-10 cents), Maryland (-9 cents), Iowa (-8 cents), Florida (-8 cents) and North Carolina (-8 cents).
The nation’s top 10 least expensive markets: Mississippi ($3.05), Texas ($3.11), Louisiana ($3.15), Alabama ($3.16), Arkansas ($3.16), Tennessee ($3.17), South Carolina ($3.21), Oklahoma ($3.26), Georgia ($3.28) and Missouri ($3.29).
Oil Market Dynamics
At the close of Wednesday’s formal trading session, WTI decreased by $3.06 to settle at $68.60. Oil prices decreased yesterday amid ongoing market concerns that rising interest rates will tip the economy into a recession. If a recession occurs, oil demand and prices will likely decline. Additionally, the EIA reported that total domestic commercial crude inventories decreased by 1.3 million bbl to 459.6 million bbl last week.