A drop in the global price of oil helped the national average for a gallon of gas to fall for a second week to land at $4.89. Economic fears of a potential global recession leading to less demand for oil dropped the price to around $107 per barrel, down from $110 last week.
“Fear is not a good reason to move a market like the one for oil, but it is a powerful motivator,” said Andrew Gross, AAA spokesperson. “The cost of oil accounts for nearly $3 for every $4.89 at the gas pump. Consumers should find more relief when fueling up if oil prices drop further.”
Please note that a vital gas price indicator was unavailable to AAA for this week’s report. The U.S. Energy Information Administration (EIA) said it was delaying the release of gasoline demand data because of “systems issues.” Demand is a sign of whether motorists are fueling up or not, which in turn may be reflected in higher or lower pump prices.
Today’s national average of $4.89 is nine cents less than a week ago, 30 cents more than a month ago, and $1.80 more than a year ago.
Quick Stats
The nation’s top 10 largest weekly decreases: Florida (−15 cents), Wisconsin (−13 cents), Delaware (−13 cents), Indiana (−12 cents), South Carolina (−11 cents), Ohio (−11 cents), Kentucky (−11 cents), Texas (−11 cents), Washington, D.C. (−11 cents) and Michigan (−11 cents).
The nation’s top 10 least expensive markets: Georgia ($4.40), Mississippi ($4.41), South Carolina ($4.42), Louisiana ($4.44), Arkansas ($4.44), Alabama ($4.49), Tennessee ($4.51), North Carolina ($4.53), Texas ($4.54) and Oklahoma ($4.56).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI increased by $3.35 to settle at $107.62. Although crude prices strengthened at the end of the week due to positive market sentiment after the stock market rallied, crude prices dropped earlier in the week amid broad market concern regarding the potential for economic growth to slow or stall due to rising interest rates and inflation. A lower economic growth rate than expected could cause crude demand to decline, leading prices to follow suit. For this week, crude prices could decline if EIA’s reporting shows a large increase in total domestic stocks.
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