Before this week's small decline, U.S. gasoline prices had increased for 17 consecutive weeks-the longest streak of rising national average gasoline prices since 1994, according to EIA's surveys.
As of Monday, March 29, the U.S. regular retail gasoline prices averaged $2.85 per gallon, when it dropped two cents compared to the previous week for the first weekly decline since November 2020.
It was in November that crude oil prices started to rise following the first good news about vaccine candidates. Prices have increased through early March, thanks to vaccine rollouts. In early March, Brent Crude prices even hit $70 per barrel, for the first time since January 2020, just before the pandemic crushed oil demand and oil prices.
Oil nearing $70 a barrel spurred talks about U.S. national average gasoline price hitting $3 a gallon for the first time since 2014.
Gasoline prices in the U.S. are primarily driven by four components: crude oil prices, refining costs, retail distribution and marketing costs, and taxes. Since taxes and retail distribution costs are generally stable, the biggest factor in gasoline price trends are changes in oil prices and refining costs, the EIA says.
After increasing for 17 weeks in a row, the average U.S. gasoline price fell week over week to March 29 for the first time since November 2020, AAA said on Monday.
"Growing stock levels and cheaper crude oil prices are putting downward pressure on pump prices for the majority of motorists," AAA spokesperson Jeanette McGee said. "These are positive signs that less expensive gas prices could be around the corner, but not enough to indicate a steady trend just yet," McGee added.
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Last week, oil prices dropped as major economies in Europe, including Germany, France, and Italy, tightened mobility restrictions and lockdowns amid a third wave of COVID-19 cases.
Going forward, U.S. gasoline prices could rise again as demand is nearly back to the levels just before the lockdowns in March last year led to a plunge in demand.
"As we approach warmer weather and motorists are increasingly getting outside, it could drive prices higher, so long as COVID-19 cases don't jump along with it and lead to new travel restrictions," said Patrick De Haan, head of petroleum analysis for GasBuddy.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More