Trends in oil prices bring relief to U.S. commuters on gas prices

Feb. 24 (UPI) -- A steady decline in the price of crude oil has put something of a ceiling over the price that U.S. consumers pay for gasoline, motor club AAA said Friday.

AAA reported a national average retail price of $3.39 for a gallon of regular unleaded gasoline, down a few cents per gallon from last week and below the $3.54 average from this time last year.

Retail prices so far have failed to top $3.50 per gallon for the national average. Andrew Gross, a spokesman for AAA, said much of the price at the pump is a reflection of global crude oil markets.

"The cost for oil accounts for 55% of what we pay at the pump, so higher or lower oil costs will play a major role in the price we pay when fueling up," he said.

The price for Brent crude oil, the global benchmark, is down about 5% this year, trading at about $7 per barrel below its 2023 peak to hit $81 per barrel on Friday. West Texas Intermediate, the U.S. benchmark, is down 7.3% so far this year, trading at around $74 per barrel.

Markets turned south Friday after the latest data on fourth-quarter gross domestic product in the U.S. economy came in lower than expected. The Organization for Economic Cooperation and Development on Tuesday said GDP for its 22 member states expanded by 0.3% during the three-month period ending in December, down from the 0.4% growth rate during the third quarter.

For U.S. commodities, total demand for refined petroleum products is down from a year ago and the amount of crude oil held in commercial storage is 9% above the five-year average for this time of year.

The recent series of winter weather storms may be contributing to some of the apparent decline in demand. More than 711,000 remained without power in Michigan on Friday morning, changing little from the day before when the massive winter storm first hit the state on Wednesday.

Meanwhile, Portland, Ore., is still digging out after recording 10.8 inches of snow on Wednesday.

The broader picture on gasoline prices is mixed. Several western states are seeing prices at around $4 per gallon, largely because of higher state taxes, while several states along the Gulf Coast are at or below $3 per gallon.

Prices could inch higher over the coming weeks, however, due to a busy period of regular refinery maintenance ahead of the shift to the summer blend of gasoline, which is more expensive to make because of the additional processing steps needed to keep it form evaporating during warmer weather.