If you need a good excuse take a trip and get away, here’s one for you: the national average for gasoline hit the lowest for this time of the year since 2005, according to prices listed on GasBuddy.
The New Tork Times states the reason gas prices are easier on the pocketbook has to do with the global oil markets plunging on Wednesday after an Energy Information Administration (EIA) report indicated higher gas inventories, which resulted in lower-than-expected fuel prices.
USA Today reports:
The EIA report, released Wednesday morning, indicated that U.S. energy producers continued to pump oil at a steady rate to make up for the reduced production among the Organization of the Petroleum Exporting Countries.
The price of West Texas Intermediate crude, considered the U.S. benchmark, fell 5%, or $2.47 a barrel, to $45.72. Oil continued to drop in Thursday trading, falling another 1% in early trading.
According to the AAA Gas Prices website, the national average for regular unleaded fuel was $2.35 on Friday, a reduction of about 3 cents from the previous week and more than 2 cents less than last year at this same time.
Friday marked the first time this year fuel prices have been lower than the previous year.
While the national average may be down considerably, it is important to note on the map below that prices greatly vary across the U.S.
Experts claim the lower gas prices are defying their annual forecast from earlier this year, with many expecting to see $3 per gallon for gas during peak travel season this time of year.
However, motorists are taking full advantage of the newly-reduced summer gas prices and planning their long-awaited family vacations.
Motorists in Ohio, Illinois, Indiana, Kentucky, Michigan, and Wisconsin are likely to notice the biggest declines compared to last year. For example, Indiana motorists are seeing a 28 cent per gallon reduction on average over last year, which translates to about $5 in saving to fill up a midsize car.
Most energy experts say the break in gasoline prices may last only a few weeks because stronger seasonal demand will soon draw down refinery storage levels. And if oil prices stay low, that would depress new production, which could eventually push prices higher.
“Drivers should be very happy because all prognosticators overestimated what they would be paying,” said Tom Kloza, global head of energy analysis for the Oil Price Information Service. “This is a slump, a buying opportunity, and Americans can enjoy it. But I think it is a little bit of an anomaly, and I expect to see higher crude oil prices in the second half of the year.”
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