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Despite Penny Bump, Gas Prices Continue On Downward Slope

Despite Penny Bump, Gas Prices Continue On Downward Slope

The national average price for regular grade gasoline is $3.36 on Friday. This price is a penny higher than one week ago, 15 cents less than one month ago and 38 cents less than the same day last year. Friday’s year-over-year discount remains just below the multi-year high discount of 47 cents registered on Oct. 8. The national average price at the pump rose by fractions of a penny the past two weeks, ending a streak of 36 consecutive daily declines – the longest run since 2008. National pump prices have now declined 41 of the past 47 days (through Friday) and have fallen more than a quarter per gallon during this slide.

While Maryland’s average price rose by a penny this week to $3.32 per gallon, many areas across the state are still experiencing declines at the pump ranging from one to three cents per gallon on average. Maryland’s average for Friday reflects a 13 cents decline compared to a month ago and a 36 cents drop from this time last year.

The nationwide average price of gasoline has fallen more than 31 cents (nearly ten percent) from $3.67 per gallon on July 19; however the price of West Texas Intermediate (WTI) crude oil has remained elevated above $100 per barrel. The 16-day partial government shutdown (which ended Thursday) had commodities (including crude oil) holding steady for the past few weeks. As the government reopened Thursday, crude oil was shaky, selling closer to the $100 per barrel mark and ending the trading day at $100.67. As of early morning Friday, the commodity was trading slightly closer to $101 per barrel.

The last time WTI crude sold for less than $100 per barrel was on July 2 (the nationwide retail average then was just under $3.50 per gallon compared to $3.36 per gallon Friday). One year ago WTI settled at $92.12 per barrel and the national average pump price was $3.74 per gallon.

The U.S. Energy Information Administration (EIA) did not release its weekly petroleum report on Wednesday due to the government shutdown. The lack of EIA data is not expected to influence price direction in the U.S. oil and gas markets. In the absence of government data, the market focused on a similar report from the American Petroleum Institute (API). The API reported crude oil stocks rose 5.9 million barrels, compared to expectations for a rise of 1.7 million barrels in the week ended Oct. 11. Gasoline stocks, according to the API, fell 2.2 million barrels, compared with an expected drop of 100,000 barrels.

The Weekend

"Despite this week’s penny bump in the average gallon cost nationwide and in Maryland, AAA Mid-Atlantic expects prices to continue trending downward in the coming months due to sufficient supplies, flat demand and cheaper winter-blend gasoline," said Christine Sarames Delise, Public Affairs Specialist for AAA Mid-Atlantic. "However if crude oil prices remain elevated, it would provide a fundamental floor of how low gas prices can ultimately go. If crude oil prices drop below the $100 per barrel mark, the national average could fall to $3.10 to $3.20 per gallon by Christmas."

The Week Ahead

AAA expects that retail gasoline prices will continue to fall in the coming months, although it will likely be a slow and steady drop. Exactly how low prices at the pump will fall will depend on crude oil prices. Gas prices cannot move too much lower if crude oil remains above the $100 per barrel mark.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

@

10/18/13

Week Ago

Month Ago

Year Ago

National

$3.36

$3.35

$3.51

$3.74

Maryland

$3.32

$3.31

$3.45

$3.68

Baltimore

$3.29

$3.28

$3.42

$3.65

Cumberland

$3.41

$3.42

$3.61

$3.88

Hagerstown

$3.40

$3.43

$3.56

$3.80

Salisbury

$3.22

$3.24

$3.29

$3.63

Washington Suburbs (MD only)

$3.36

$3.35

$3.49

$3.70

Crude Oil

$100.67 per barrel (at Thursday’s close, 10/17/13)

$103.01 per barrel (Thursday, 10/10/13)

$105.42 per barrel (9/17/13)

$92.12 per barrel (10/17/12)

 

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