The national average price for regular unleaded gasoline continues to drop as motorists are now paying, on average, the lowest price for gasoline during July since the recession year of 2009.
The national average price is $2.71 per gallon, which is a nickel per gallon less than one week ago and seven cents less than one month ago. Drivers are saving 82 cents per gallon at the pump compared to a year ago, according to AAA. GasBuddy.com also reports that prices continued to fall this week.
Weekly price comparisons show the majority of drivers in 43 states and Washington, D.C. are saving at the pump. The price is down a dime or more in Ohio, where prices dropped by 17 cents, as well as Indiana, Kentucky and Michigan and despite some regional differences within each state, motorists in a total of nine states are saving a nickel or more per gallon week-over-week. Retail averages climbed higher in seven states during the same period, but in less dramatic fashion.
The global oil market touched multi-month lows to open the week’s trading session in reaction to signals that the market is likely remain oversupplied in the near term, which is expected to keep downward pressure on prices. Worse than expected economic data out of China showed growth in the country to be more volatile than anticipated, which could further increase the global glut in oil and gasoline.
Domestic crude inventories grew by 2.5 million barrels in the most recent weekly report, while the number of U.S. oil rigs increased by 21 – the largest gain since April 2014. Supply continues to outpace domestic demand, and as a result, West Texas Intermediate crude oil fell below $50 per barrel for the first time since April this past week.
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The slow decline in the national average is in stark contrast to regional price volatility that continues to characterize some markets, as a result of localized refinery issues and tight supplies.
Pump prices have moved dramatically higher in California this month due unexpected drawdowns in supplies, shortages in the blending components used to make the state’s mandated boutique fuel and recent reports of several refineries dealing with production issues.
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On the other end of the spectrum, production at refineries in the Midwest is reported to have reached a 2015 high and prices have subsequently moved noticeably lower in much of the region.
Crude oil inventories decreased by 4.2 million barrels to a total of 459.7 million barrels. At that level, inventories are 92.3 million barrels, or 25.1%, above last year and are well above the upper limit of the average range for this time of year.
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Gasoline inventories decreased by 0.4 million barrels to 215.9 million barrels. At 215.9 million barrels, inventories are down 2.3 million barrels, or 1.1% lower than one year ago. Gasoline supplied to end users amounted to 9.3 million barrels per day, or 411,000 barrels per day lower than the previous week. So far in 2015, gasoline supplied is 4% higher compared with the same period in 2014, according to the Energy Information Administration.