Gas prices are expected to fall as summer driving season ends
As the summer driving season approaches the Labor Day weekend, the AAI Automotive Group expects a significant drop in gasoline prices in the pump.
The average price of domestic gasoline is likely to average $ 2.70 a gallon this fall, down from current prices of $ 2.84 a gallon and more than a quarter cheaper than the record price this year at $ 2.97 in May, AAA reported on Wednesday.
“Consumers will see savings when they fill the pump this fall,” Janet Casselano said, “Considering the prices of cheap gas oline, prices of relatively stable crude oil in August, and the expected drop in consumer demand for gasoline after Labor Day. AAA spokesman.
Another factor contributing to the expected drop in prices in the pump is the shift to winter-heated gasoline in mid-September from the stricter summer blends of the environment, the group of motorists said, adding winter fuel was cheaper to produce.
The report added that the arrival of the fall also leads to a decline in demand for gasoline, with the decline of summer road trips and holidays.
However, the price of gasoline this year was “much more expensive” than in 2017, according to AAA. The annual average of $ 2.71 is 41 cents above last year’s average. At the same time, prices in the futures market also rose, with prices rising more than 30% over the past 12 months, based on the October contract of RBV8 -0.20%.
The volatility of the CLV8 crude market, + 0.01% can still prevent gas prices cheaper, said AAA. This will depend on the main influences affecting the market, including production from Venezuela, whose economy is collapsing, the promise of higher crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) and geopolitical uncertainty in the Middle East.
The oil market continues to monitor the possible impact of US sanctions on Iran after Washington said in May it would withdraw from Iran’s nuclear deal.
“AAA” said that the first round of sanctions imposed on the country, targeting the Iranian financial sector, came into force in August and led to a slight increase in crude oil prices. “With effect in November, the next round of sanctions will target the Iranian energy sector, including its crude oil exports, and there is a possibility of a more sustainable impact on crude oil prices.”
At the same time, the “mere threat” of the Atlantic hurricane in the United States would lead to higher gasoline fuel prices due to limited supply and delivery challenges.