Gasoline prices stable as demand is balanced by lower oil prices

May 12 (UPI) -- Much like crude oil prices, the retail price for a gallon of regular unleaded gasoline is at something of a standstill given competing economic trends, analysis finds.

Travel club AAA put the national average retail price at $3.54 for Friday, about 2 cents less per gallon than this time last week. Prices during the first week of May had dropped 7 cents compared with the prior week, suggesting the commodities market is a bit static.

Andrew Gross, a spokesman for AAA, said consumer demand is strong, but a low price for crude oil is having a balancing effect.

"Increasing demand for gasoline would usually drive pump prices higher, but the cost for oil has remained low lately, so drivers should benefit from stable pump prices as Memorial Day draws near," he said.

Crude oil prices, which account for the bulk of what consumers see at the pump, were relatively static over the course of the week. The price for Brent crude oil, the global benchmark, traded in the mid $70 per barrel range this week, lending stability to the retail price of gasoline.

On the demand side, economists at the Organization of the Petroleum Exporting Countries left most of their forecasts for growth unchanged from the prior month, adding support to the sentiment that markets are in a bit of a lull.

In the U.S. economy, however, data from the Energy Information Administration, the statistical arm of the Energy Department, showed implied demand for motor gasoline over the four-week period ending May 5 was 2.2% higher than this time last year.

The upcoming Memorial Day long holiday weekend at the end of May signals the start of the summer travel season, where the end of the school year leaves room for longer road trips and vacations.

EIA figures retail gasoline prices will average around $3.40 per gallon through September, which is a 20% decrease from year-ago levels. Prices should vary, however, from a $3 per gallon average along the Gulf Coast to $4.30 on the West Coast.

Gulf Coast markets are close to oil fields and large refinery centers, while elevated taxes in states such as California keep prices well above the national average.

For the year, EIA expects the retail average to be around $3.33 per gallon, nearly 10 cents lower than its estimate from April. The agency also lowered its estimate for the price of Brent crude oil, from $85 per barrel to $79 per barrel for full-year 2023.