After a steady string of increases, the national average price for a gallon of regular gasoline fell by 3.5 cents last week to reach $2.76, according to industry analysts at GasBuddy. The national average reached $2.80 a gallon a week ago.
Prior to the Independence Day holiday weekend, U.S. retail gasoline prices had fallen for seven straight weeks. An attack on two oil tankers in the Strait of Hormuz pushed oil prices up beginning in about mid-June, although U.S. pump prices didn’t react quickly to the crude price increases. From a low of around $51 a barrel, U.S. West Texas Intermediate (WTI) jumped to nearly $61 about 10 days ago. Since then the price has come down to around $56 a barrel.
A global economic slowdown and rising global inventories are weighing on crude prices. The International Energy Agency last week cut its demand growth estimate for this year to 1.1 million barrels a day, down 400,000 barrels from the original estimate and down 100,000 barrels from the prior estimate.
GasBuddy’s head of petroleum analysis, Patrick DeHaan, noted, “Average U.S. gas prices drifted lower this week as oil’s downturn has picked up steam thanks to a smaller than expected decline in U.S. oil inventories and concerns remain over the strength of the U.S. economy.”
All but a few states saw average prices decline last week, with especially large declines in the Great Lakes region. The most common price last week for a gallon of regular gas was $2.69, down by a dime from the prior week. The average price at the 10% of gas stations charging the most for gas was $3.60 a gallon, while the average at the 10% charging the least was $2.35.
As of Monday morning, the national average gasoline price is about $2.72 a gallon, seven cents higher than a week ago but still down by nearly a dime from the month-ago price of $2.82. One year ago, a gallon of gas cost $2.85. Last week’s average was 10.5 cents higher than a month ago and just over seven cents lower than the year-ago price for the same week.
Compared with the prior week, the five states where drivers are paying the most for gas are Hawaii ($3.81, down six cents), California ($3.74, unchanged) Nevada ($3.31, down a penny), Washington ($3.22, also a penny lower) and Alaska ($3.17, down three cents). Oregon is the only other state where gas currently costs more than $3 a gallon.
The five states where gas is cheapest are Mississippi ($2.37, flat), Alabama ($2.41, flat), Louisiana ($2.41, a penny higher), Arkansas ($2.43, flat) and South Carolina ($2.43, also flat).
GasBuddy expects higher prices in the Great Lakes in the coming week, with downward trends continuing throughout the rest of the United States. Traders’ reaction to Iran’s seizure of a United Kingdom-based oil tanker last Friday may push crude prices higher this week.
Americans continue to buy light trucks, sport utility vehicles and crossovers in large numbers, but automakers are on track to sell fewer cars this year than they did last year.