Fuel prices are lower as of Oct. 29, 2018, continuing a trend of recent weeks, but analysts disagree on whether they will continue to drop. File Photo by A.J. Sisco/UPI | License Photo
Oct. 30 (UPI) -- The AAA auto driver club forecasts that recent declines in gasoline prices to a national average of $2.82 per gallon will be short-lived and projected rises as soon as later this week, but an analyst disagreed.
The fuel price average "is the lowest since mid-September, but the cheaper gas prices may just be a temporary treat for motorists," said the AAA, which has 58 million members and tracks weekly fuel station price changes.
"AAA expects that gas prices will likely start to increase as early as later this week ahead of the Nov. 4 Iran sanctions announcement and the mid-term elections," AAA spokesperson Jeanette Casselano said in the report.
GasBuddy, a Boston-based company that gathers data from 140,000 fuel stations in three countries, disagreed with the forecast. It had a similar estimate for the current U.S. national average gasoline price at $2.81 per gallon, or a 2.9 cents per gallon on-week decline.
"Oil prices have fallen over 10 percent in recent weeks, providing the bulk of the gas price relief we're seeing, and will continue to see for the next week or two at least," GasBuddy analyst Patrick DeHaan said Monday.
"While there is still some anxiety globally over a lack of spare oil capacity, the market has been laser focused on discussion from oil producers, including Russia, that they will act to raise production," he added.
AAA said in its Oct. 29 report that the national average it estimated was "three cents less than last week, six cents cheaper than last month and 35 cents more expensive than this time last year."
The nation's largest monthly changes were in Michigan, with a 20 cents per gallon decline to $2.79 per gallon, and Iowa, with an 18 cents per gallon decline to $2.68 per gallon, according to the AAA.
The cheapest gasoline prices were in Delaware, South Carolina and Missouri, all at $2.52 per gallon on average.
The highest prices in the continental U.S. were in California, at $3.80 per gallon, the AAA said.
Future prices for the main gasoline components showed a declining trend into December. Gasoline sold in the United States is in most states a combination of Reformulated Gasoline Blendstock for Oxygen Blending, or RBOB, mixed with ethanol.
RBOB for November delivery traded Tuesday morning in the options and futures exchange CME as of 8:52 a.m. at $1.8123 per gallon, declining to $1.8077 per gallon for December delivery. The unit of trading is 42,000 gallons.
Ethanol for November delivery traded Tuesday morning at $1.26 per gallon as of the most recent update for Oct. 30 at 5:48 a.m EST, rising to $1.275 per gallon for December delivery. The ethanol futures contract is for 29,000 gallons of ethanol.
California prices are higher because the gasoline uses a more expensive component known as CBOB that helps fuel sellers meet stricter environment regulations. CBOB for October delivery was last quoted by CME on Oct. 29 at $2.0092 per gallon according to data available Tuesday morning.