WASHINGTON, Dec. 8 (UPI) — Supply and demand dynamics on the crude oil market, coupled with downward pressure from OPEC’s meeting, should keep U.S. gas prices lower, AAA said.
Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.03, a fraction of a percent below Monday’s price but about 8.5 percent, or 19 cents, lower than one month ago.
With colder wintry weather gripping parts of the United States, AAA said demand typically falls in the waning days of the year despite busy holiday travel. That, and ample production, is pushing prices at the pump downward.
“This combination of ample production and increasing gasoline inventories are likely to keep gas prices relatively low, and barring any unforeseen shifts in market fundamentals, averages are likely to continue to decline leading into 2016,” the motor club said in a weekly report on the retail sector.
Crude oil prices inched higher in November amid ongoing concerns about military tensions in the Middle East and, later, concerns about the pace of growth in the European economy. Last week, ministers from the Organization of Petroleum Exporting Countries left their regular meeting in Vienna with few concrete reactions to the economic landscape, leaving markets favoring the supply side and crude oil prices deeply in the red.
Brent crude oil prices are down about 5 percent since Friday. Crude oil prices are the dominant market factor influencing retail gasoline prices.
From AAA’s perspective, markets, both in terms of crude oil and for gasoline, will remain oversupplied.
Twenty three states are reporting an average price below the $2 mark. Missouri has the lowest price in the nation at $1.80.
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