Gas Prices Stabilize With Three Weeks Remaining In The Summer Driving Season

Following last week’s jump in gas prices, prices at the pump leveled off this week with no significant movement in either direction. This is welcome news for motorists looking to take advantage of the three remaining weeks of the summer driving season. Gas price stability, and even declines in some regions, are signs of weak summer demand. The national average price for regular grade gasoline dropped a penny this week to $2.77 a gallon Friday, 12 cents higher than the same date last year, but still $1.34 less than the record of $4.11 set two summers ago.
After breaking through the $80 a barrel mark last week, crude oil pulled back below that pivotal mark this week. Poor jobs data, the number of people filing jobless claims unexpectedly rose to its highest level in nearly six months, and an overall feeling of unease in the strength of the U.S. economic recovery led crude oil to fall more than 3 percent on Wednesday, its biggest drop in 6 weeks, and went on to drop 6% on the week when it closed at $75.56 Friday.
In its weekly report, the Energy Information Administration’s (EIA) data showed crude inventories fell 3 million barrels to 355 million barrels. Gasoline stocks rose 409,000 barrels to 222.3 million barrels, more than expected in the summer when stocks normally decline.
The Weekend
“With three weeks remaining in the summer driving season, gas price stability is welcome news for motorists wanting to take to the road for the weekend or an extended vacation,” said Tracy E. Noble, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Crude oil trading below $80 a barrel and continued signs of a sluggish economic recovery will likely contribute to gas price stability as we approach the Labor Day holiday weekend.”
The Week Ahead
The Organization of the Petroleum Exporting Countries (OPEC) forecasts demand for oil will continue to grow slowly in 2011, when world economic expansion is projected to be slightly lower than this year’s, leaving the current supplies intact. Analysts believe signs of global economic recovery are underway, although there continue to be times of weakness nationally and internationally.