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The national average for a gallon of gas at the pump in the United States fell to $4.139 on Thursday, the 51st consecutive day the country has seen a price drop for gasoline, according to AAA.
The month-ago average for American drivers was $4.807, representing a 16% reduction at the pump over the past 30 days and a sustained break in the upward trend that saw prices peak at $5.02 on June 14th.
Whether the downward price trend will continue will depend on the demand situation, says AAA, noting that the steady drop in gasoline prices could reverse with a “slight uptick” in demand.
“We know that most American drivers have made significant changes in their driving habits to cope with high gas prices,” AAA spokesperson Andrew Gross said. “But with gas below $4 a gallon at nearly half of the gas stations around the country, it’s possible that gas demand could rise.”
On Wednesday, the Energy Information Administration (EIA) recorded a slight increase in gasoline inventories of 200,000 barrels in the week ending July 29th, with production averaging 9.3 million barrels daily. That increase compares to a 3.3-milllion-barrel draw the previous week.
Earlier this week, the EIA noted that gasoline demand had risen from 8.52 million barrels per day to 9.25 million barrels per day the previous week, but still 80,000 bpd lower than for the same period last year. However, the AAA notes that if that demand rise continues, we could see a slowing of price reductions at the pump.
The EIA’s Wednesday inventory report is more conducive to continued price decreases for American drivers. While the previous week’s report showed a large decrease in stockpiles, this week’s report shows a slight increase, indicating more available supply.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com