1 of 3 | Crude oi prices are under pressure from fears of a global recession and that decline is making its way to the consumer level, notes Patrick DeHaan, the senior petroleum analyst for GasBuddy. File Photo by John Angelillo/UPI | License Photo
May 1 (UPI) -- A recent decline in retail-level gasoline prices should start to accelerate, provided crude oil prices remain under pressure, a senior market analyst said Monday.
Travel club AAA put the national average retail price at $3.61 for a gallon of regular unleaded gasoline on Monday, about 7 cents per gallon lower than week-ago levels. Recent trends in the price of crude oil are making their way down to the consumer level.
"After declining the prior week at a slow pace, the drop in the national average has gained momentum," said Patrick DeHaan, the senior petroleum analyst at Chicago-based GasBuddy. "Oil prices have come under additional selling pressure alongside wholesale gasoline prices, giving retailers room to pass on the lower prices."
Weakness in the U.S. and European economies has pulled crude oil prices lower in recent weeks. The price for Brent crude oil, the global benchmark for the price of oil, was down 1.7% at the start of trading Monday to hit $79 per barrel amid concerns economies would face further headwinds given the prospects for additional rate hikes at the world's central banks.
The price of crude oil, along with state taxes and transportation costs, accounts for the bulk of what consumers see at the pump. Brent was in the mid-$80 range as recently as of April 19, when retail gasoline prices were closer to $3.68 per gallon.
Elsewhere, refineries are coming back to full strength following a regular period of spring maintenance, which will help put more gasoline on the consumer market. That, DeHaan said, could lead to a lower-for-longer outlook at the retail level.
No state has yet to post an average price below $3 per gallon, though Mississippi is close with $3.08 per gallon for Monday.
The federal government put the full-year national average at $3.42 this year. An updated estimate is out May 9.