Low demand, high production means cheap gas

June 20 (UPI) -- Tepid consumer demand for gasoline and high levels of oil production from OPEC members means low prices at the pump, AAA said.

The motor club reported a national average retail price for a gallon of regular unleaded gasoline at $2.29, down a fraction of a percent from Monday, 1.8 percent lower than last week and 2 percent, or nearly 5 cents per gallon, less expensive than this date last year.

AAA said the drop in gasoline prices came in response to an increase in oil production from Libya and Nigeria, two members of the Organization of Petroleum Exporting Countries exempt from a multilateral agreement to stem output, and a drop off in consumer demand since the long Memorial Day holiday weekend.

"At 56 percent of gas stations nationwide, consumers can find gas for less than $2.24, which is below today's national average gasoline price of $2.29 per gallon," the motor club said in its weekly retail market report. "Across the country, gas prices dropped in all but four states on the week."

The national average price for gasoline has declined for 18 days in a row.

The West Coast remains the most expensive market in the country, though AAA said prices there are moderating, with California drivers seeing gasoline prices dip below the $3 mark. The motor club attributed the decline in gas prices to higher gasoline inventories and a surge in imports, noting prices could continue to decline if those trends continue.

The Great Lakes market remains the most volatile, in part because of the high concentration of refineries in the area. Ohio, for example, had a state average price at $2.11 per gallon for Tuesday, lower than last week by 4.5 percent and 15 percent, or 38 cents, less than this date in 2016.

"Growing inventory and mediocre demand will allow consumers to continue to reap the benefit of cheap gas prices," the motor club said of the region.

A federal report from June 6 predicted a national average price during the summer driving season, which runs from April through September, of $2.46 per gallon, compared with $2.23 per gallon last season. The higher forecast was because the government expected higher oil prices, though oil prices are 2.3 percent less than they were on the date of the federal report.