Higher oil prices have led to a reversal of sorts, with improved economics for U.S. shale producers bringing retail gas prices lower, a market review found.
Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.30, a slight decrease from Monday. The trend lower follows relatively stability for crude oil prices, but improved conditions for U.S. shale oil operators.
Crude oil prices started 2017 at 18-month highs for intraday peaks, but have since settled back into the mid $50 per barrel range as competing trends pull on market direction. The Organization of Petroleum Exporting Countries agreed to put a cap on production to erase the oversupply that pushed oil prices below $30 per barrel last year. That pushed oil prices higher, but also improved the market conditions enough so that the very shale oil producers that helped lead to the glut returned the work and offset the loss of output from OPEC.
AAA in its weekly retail market report found this balancing effect is keeping a lid on crude oil prices and easing the pressure for consumers.
"Traders will keep a close eye on how OPEC output cuts and increased U.S. production impact the market moving forward," the report read.
By region, the West Coast maintains its hold on the claim to the most expensive market in the country, with California, Washington and Oregon in the top five. Supplies of gasoline in the region are adequate, though those states also have high fuel taxes.
The Great Lakes region, meanwhile, continues as the most volatile market in the region, with four states there taking claim to those with the sharpest declines in retail gasoline prices.
"Storage increases paired with a drop in demand this month likely attributed to regional and national price declines," the retail market report read.
Tennessee had the lowest retail price in the country at $2.10 per gallon. The U.S. Energy Information Administration predicts a national average price for gas for full-year 2017 at $2.38.