Gas prices are still falling even after oil prices increased during the tail-end of last week. Prices at the pump are dropping at a rate of about a half cent a day. The national average price for a gallon of regular unleaded is $1.83, 7 cents lower than a month ago, 21 cents lower than this time last year.
“Oil prices dropped like a rock last week, and took gas prices with them,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “The low price of crude remains the primary contributor to discounts at the pump, making it cheaper to produce gasoline.”
Crude prices went on a rollercoaster ride last week. A barrel of oil dipped down to $26.55 (lowest daily settlement since May 7, 2003) on Wednesday, then climbed to $32.19 (highest since January 8, 2016) on Friday. Some speculators believe the price of oil has bottomed out and could reach $50 by the end of 2016, and $70 next year. The latest forecast from the U.S. Energy Information Administration has oil averaging $38.54 this year and $47 in 2017.
“Gas prices could slip another 5-10 cents to align with current crude levels, but if oil prices gain solid ground this week, the gas price drop could come to an end,” Jenkins said. “Even if oil remains the same, gas prices could start inching up in the next couple of weeks as refinery maintenance season begins. This is a time when refineries do routine upkeep on their machinery, which slows their output. Because of this, we’ve seen gas prices rise 50 cents between February and June.”
The average price for gasoline is under $2 in 38 states. The state average has been under $2 a gallon for 23 days in Florida, 62 days in Georgia, and 72 days in Tennessee.