Gas prices follow crude oil lower

Retail prices are the lowest they've been in roughly seven years.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Jan. 12, 2016 at 6:19 AM
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WASHINGTON, Jan. 12 (UPI) -- The average price for a gallon of regular unleaded gasoline in the United States is the cheapest it's been in nearly seven years, retail market analyses find.

Motor club AAA reports a national average price at around 1.96 per gallon for Tuesday, about 1.8 percent, or three cents, lower than one week ago. Crude oil prices started the year with drastic declines that followed two days of trading in the Chinese stock markets shortened by emergency mechanisms after shares dropped around 7 percent. Trends in oil prices are usually matched by the price at the pump.

AAA said retail gasoline prices have dropped for 56 of the past 66 days "and should remain relatively low because there is more than enough oil and gasoline around the world to meet demand."

Separate analysis from retail market watchdog group GasBuddy finds gas prices should continue moving lower as the large build in crude oil inventories in the United States last week suggested weak seasonal demand.

"Such a large rise came at the hands of a plunge in gasoline demand, likely coming as Americans get back into their work and school routines after the holiday season," their emailed report read.

Gasoline prices are typically lowest during the winter because seasonal demand is impacted by cold and snowy weather. Consumer gasoline prices usually peak by around May or June as refiners start regular maintenance to switch to a summer blend of gasoline, which requires additional processing steps to meet environmental safeguards.

California, which because of higher taxes usually has some of the highest gas prices in the nation, is burdened by a string of refinery issues, though even California prices dropped in response to plummeting crude oil prices.

All 50 states saw a decline in gas prices from one week ago. Missouri had the lowest state average as of Tuesday at $1.64 per gallon.

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