Waning demand pressures and relatively lower crude oil prices are pushing the retail price for gasoline lower just in time for the last major summer holiday in the United States. File Photo by Brian Kersey/UPI | License Photo
Aug. 21 (UPI) -- U.S. consumer demand for gasoline is slowing down and that should start bringing relief to travelers ahead of the next major holiday, analysts said.
Moto club AAA reported a national average retail price of $2.83 for a gallon of regular unleaded gasoline, slightly lower than Monday and about 2 cents less than one week ago. Barring a few outliers, most state averages are on a slow, but steady, decline.
Jeanette Casselano, a spokeswoman for the motor club, said prices are following a slow decline in consumer demand, a trend that should keep a lid on the price at the pump.
"The national average is expected to keep moving lower, especially with the switchover to lower grade gasoline in September," she said in a statement.
After Sept. 15, refiners start making a winter blend of gasoline, which is less expensive to make because there are fewer processing steps necessary compared to the summer blend. At their lowest price in more than 100 days, that should lead to even more discounts at the pump.
Patrick DeHaan, the lead petroleum analyst at GasBuddy, said in a separate statement that expectations of a slowdown in global economic growth are keeping oil prices from spiking, bringing relief to consumers as well.
"As we race towards summer's finish line, we may see more pessimism weigh on oil markets, offering some relief to weary drivers who've seen the most expensive summer at the pump since 2014," he said. "Labor Day will likely claim the cheapest prices for a summer holiday this year."
By market, the West Coast is the most expensive in the country with California setting the high-water mark at $3.50 per gallon. That market is at a tipping point in terms of supplies, with a drain on gasoline inventories offset by slowing demand. That suggests any sort of shock to the system could push the price of gasoline higher.
The Great Lakes region, meanwhile, is the most volatile. Michigan reported a 10 cent drop in the state average price for gas, while drivers across the border in Ohio saw the price at the pump increase 4 cents per gallon. The region as a whole should see relief at the pump as inventory levels for gasoline are showing a surplus.
The federal government reported gasoline prices likely peaked nationally in May and should average about $2.83 per gallon through September.