AAA: Low demand leads to lower gasoline prices

Feb. 17 (UPI) -- Lackluster demand and lingering concerns about an economic slowdown have kept retail-level gasoline prices in the U.S. economy from moving very much, data show.

Travel club AAA reported a national average retail price of $3.42 for a gallon of regular unleaded gasoline for Friday, relatively unchanged from last week.

"Slack demand for gas and waffling oil prices are the primary reasons the national average is stuck in neutral," AAA stated.

Crude oil prices on Friday were in a deep retraction amid concerns that policies at the U.S. Federal Reserve will create further economic headwinds. Consumer-level inflation increased month-on-month in January and wholesale prices are on the rise, raising concerns the Fed isn't done increasing lending rates to slow things down.

Demand, however, has slumped recently. Data from the U.S. Energy Department showed the total amount of refined petroleum products supplied to the market over the four-week period ending Feb. 10 averaged 19.8 million barrels per day, down more than 10% from year-ago levels and less than the similar week in 2020, to discount the COVID-19 pandemic.

Total gasoline inventories increased during the period ending Feb. 10, suggesting a lull in consumer demand.

The trend lower is most apparent in states near the dense network of refineries along the Gulf Coast. AAA data show Texas has the lowest price in the nation at $3.03 per gallon.

This could be a low point, however, given forecasts for a busy period of regular seasonal maintenance at the nation's refineries and the switch to the summer-blend of gasoline, which is more expensive to make because of the additional processing needed to keep it from evaporating in warmer weather.

While a surge as high as $4 per gallon for the national average is certainly possible during the summer, federal forecasts put the average price for the year at $3.39 per gallon, down from the $3.97 average from 2022.