Gasoline Prices Drop for the Third Consecutive Day

The average per gallon price of regular unleaded gasoline recently dropped for the third consecutive day. From $3.8999 per gallon, the average gasoline price dropped for another day by 0.8 cent per gallon to end at $3.891 in the recent daily poll performed for the American Automobile Association. Over the previous week, prices at the pump have already decreased by 2 cents.

In spite of the fall, the average gasoline price is still over $4 per gallon in Washington D.C. and 8 other states. Hawaii sees the highest price in the entire country at an average of $4.61 per gallon. On the contrary, Wyoming pays the lowest price for gasoline, with an average of $3.64 per gallon.

The reduction reflects a moderate fall in crude oil prices which comprise almost 70% of gasoline cost. According to the recent Lundberg Survey, gasoline prices may reach its highest level if oil prices remain steady.

The recent crude oil price history trend has turned lower in recent days due to a variety of causes. However, the largest one is the decision of Iran to negotiate its nuclear ambitions. Other factors contributing to the drop in crude oil prices include commitments from Saudi Arabia to compensate for any loss in Iranian oil supply, weakening American demand because of the economy and reversal of a proposed pipeline that will bring additional oil to world markets.

But, all analysts caution that events can easily change, and some aren’t convinced that we’ve seen the end of the story in Iran. The entire summer season remains vulnerable to any possible headlines that may stem from the region. Gasoline prices also increase as national refineries switch from winter gasoline to summer blends.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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