Pain at the pump continued to ease for motorists across the country last week.
On St. Patrick’s Day as less “green” is being spent on gasoline. The national average price of regular grade gasoline dropped a penny this week to $3.70 Friday. In Delaware, prices slid below $3.50 a gallon, with a station in Newark coming in at $3.45, according to AAA Mid-Atlantic.
The national price is eight cents more than one month ago, but it is 12 cents less expensive than the average price one year ago. The average has declined for 12 straight days, the longest streak of falling prices in 2013. That’s counter to the trend that motorists may remember from the same period in recent years. The price increased by 17 cents and six cents during the same periods in 2011 and 2012, respectively.
AAA Mid-Atlantic reported the spike in pump prices earlier this year was a product of refinery maintenance and concerns, rather than more expensive crude oil. The refinery issues pressured both wholesale and futures prices higher for gasoline, while crude oil prices only increased slightly during the same period. The recent decline in the national average is partially due to cheaper crude oil but is more closely linked to sharply lower wholesale gasoline prices.
Oil production in the U.S. and Canada continues to rise, as evidenced by the long trains of tank cars coming in to the PBF refinery in Delaware City. The price for that oil is lower, more than making up for the added cost of using rail.
Crude oil made its way above $93 per barrel last week in response to positive domestic and international economic data.
These factors helped send the Dow Jones industrial average to a record high earlier this month and extend a positive streak to 10 days (before retreating slightly Friday to end its longest streak in 16 years). Sentiment continues to grow that the U.S. economy is gaining traction, which would likely lead to increased crude oil (and subsequently gasoline) demand. Crude oil closed at $93.45 Friday, down 1.6 percent for the week, AAA reported.
In its weekly report, the Energy Information Administration (EIA) data showed crude oil stocks rose (for the eighth straight week) 2.6 million barrels to 384 million barrels, putting inventory levels at their highest level of 2013 and 10.5 percent higher than one year ago. Gasoline stocks dropped 3.6 million barrels to 224.3 million barrels, likely due to the switch over to summer blended gasoline.
“Motorists are enjoying a bit o‘ green this St. Patrick’s – in their wallets that is – thanks to a downward trend in gas prices this month,” said Jana L. Tidwell, public affairs specialist for AAA Mid-Atlantic. “Although it is too soon to say whether retail prices have peaked for the spring (there is still refinery maintenance to be completed and much of the country must still transition to summer-blend gasoline), AAA believes prices at the pump should level off this spring and retreat into the summer months. In fact, AAA gas price partner Tom Kloza of OPIS believes ‘whatever you pay on St. Patrick’s Day will be considerable more that you’ll pay on July 4th or Labor Day.”
