- Tim Evanson / Foter / CC BY-SA
Prices at the pump were down slightly last week as the summer driving season moved into prime time, AAA Mid-Atlantic reported.
Gasoline prices were down three cents last week in Delaware according to the Wilmington-based organization. The average price was $2.64, with many stations selling at about $2.60 a gallon.
Nationally, the retail average is four cents per gallon less than the 2015 peak price of $2.80 per gallon in mid-June.
A year ago, the average price at the pump for a gallon of regular in Delaweare was $3.52 a gallon.
Lower global crude oil prices are contributing downward pressure on gasoline prices across the nation.
A fix for Greek debt crisis and a pending international deal with oil-rich Iran have the potential to put downward pressure on oil prices. Crude oil, at the end of the week, was selling below $51 a barrel.
U.S. crude oil inventories remain at levels not seen in 80 years, putting further pressure on prices.
“Global activities, including the nuclear deal with Iran, will continue to garner attention, though it may take some time to have a major impact on gas prices,” said Jana Tidwell, manager of Public and Government Affairs for AAA Mid-Atlantic. “Currently, drivers are paying the cheapest summertime gas prices since 2010, which could continue into the fall as people begin to drive less and the glut of oil in the market continues to grow.”
AAA Mid-Atlantic noted that sanctions placed on Iran could last for at least a few more months and the country will need to ramp up production, which could be challenging because the sanctions have limited technology and investment.
Iranian crude oil could potentially flood an oversaturated market, which could push crude oil and later gas prices downward. Oil represents about 60 percent of the cost of gasoline. A $10 per barrel change in the cost of crude oil can send gas prices down by about 25 cents per gallon.
Oil companies have slowed down drilling activity in the US as low crude oil prices emerged. Producers may also reduce production until prices return to higher levels.
Oil industry analysts say Saudi Arabia will keep the oil flowing at low prices as a way to hold down surging US production from wells that often have a break-even point of $50 a barrel.
For further information on gas prices, you can check AAA’s Fuel Price Finder (AAA.com/fuelfinder.
