US Gas Prices Take Big Dive Last Month
Despite the tension in the Middle East, gasoline prices have dropped more than 16 cents per gallon in the past month, according to records compiled by AAA, reported The Detroit Bureau.
Gasoline prices vary by region but overall the average price for regular gasoline dropped more than 9 cents per gallon in the two weeks ended July 25 to $3.5795 a gallon, according to Lundberg Survey Inc., which surveys about 1,200 gasoline stations around the country.
A recent U.S. Energy Information Association report also indicated the average price of crude oil dropped by $1.04 per barrel.
Prices of gasoline and crude oil, which shot upwards in mid-June when Islamic militants overran government troops in the northern and central Iraq, one of the world’s major oil producing states.
Analysts credit a combination of rising domestic oil production in the U.S. and conservation, notably stiffer fuel economy standards for automobiles have for the first time since the 1970s have helped reduce the threat of an oil shock for the first time since the 1970s.
A new report by the EIA also hints that other factors also have come into play, which is that the members of the Organization of Petroleum Exporting Countries (OPEC) have an incentive to continue finding ways to bring more crude to market. OPEC’s cumulative profits worldwide from petroleum sales dropped roughly 7% to $826 billion despite the surge in car sales – and driving – in China.
The highest price for gasoline in the continental U.S. among the markets surveyed was in San Francisco, at $4.03 a gallon, Lundberg said. The lowest price was in Tulsa, Oklahoma, where customers paid an average of $3.23 per gallon at the pump. In the nation’s two largest markets regular gasoline averaged $3.83 on Long Island, outside of New York City, and $3.96 in car dependent Los Angeles.
Refineries processed 16.81 million barrels a day in the week ended July 18, just off the highs reached the prior week, according to the EIA.
Bloomberg also reported that the price of gasoline futures on the Nymex slipped 4.32 cents, or 1.5%, to $2.8653 a gallon in the two weeks ended July 25 as supplies grew on strong refinery production, which suggests gasoline price will continue to gall.
Gasoline stockpiles also increased 3.38 million barrels to 217.9 million, EIA data show. Demand over the four weeks ended July 18 was 8.988 million barrels a day, 0.6% below a year earlier.
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