Shortly after 9:00 a.m. ET Tuesday morning, the price of West Texas Intermediate (WTI) crude oil started dropping from an intra-day high of $94.93 to reach a low point of $91.02 shortly after noon, a drop of more than 4%. WTI traded at around $91.30 in the early afternoon, down about 3.3% from Monday’s closing price of $94.57.
A report from Reuters that OPEC had increased its output to a level not seen in nearly two years, combined with a stronger dollar, torched crude prices following the report. OPEC produced nearly 31 million barrels of crude per day in September, according to Reuters, up from 30.15 million barrels in August.
In the United States, AAA reported that drivers paid the lowest average September price in four years for a gallon of regular gasoline. At $3.39 per gallon, regular gas cost 13 cents a gallon less than last year and 44 cents a gallon less than 2012. Gasoline prices fell about 10 cents a gallon during the month of September.
AAA said that there is at least one gas station in 26 U.S. states currently selling gasoline for less than $3.00 a gallon, and the national average price on Tuesday is $3.33, the lowest average price since February. AAA also notes that gasoline prices typically fall in September as refiners can sell cheaper winter-grade fuel beginning on September 15. The absence of any major storms in the Gulf of Mexico this year has meant that production from the area has been uninterrupted.
By the end of 2014, AAA expects that the national average price for a gallon of gas will drop to a range of $3.10 to $3.20. That would be the closest the national average has come to $3.00 a gallon since 2010, when the Great Recession pushed the average price in September to $2.757 per gallon, according to U.S. EIA data.