Though fuel costs typically peak throughout the warmest months of the yr when driving demand is excessive, specialists level to a number of constructive elements shaping up for drivers this summer time.
The typical value for a gallon of fuel is now about $3.50, which is 14 cents cheaper than a month in the past and the bottom nationwide common since March, in response to GasBuddy.
Fuel costs have fallen as a result of oil costs are down 7% previously month, and crude oil accounts for 55% of what you pay for a gallon of fuel.
A drop in gasoline demand because of much less driving exercise after the Memorial Day vacation has additionally taken strain off costs. And in response to a recent report from AAA, growing gasoline provide is one other bit of excellent information for motorists.
“Gas prices will likely keep up this slow sag now that we are past the Memorial Day travel weekend,” AAA spokesperson Andrew Gross mentioned within the report. “But it’s time to start weather watching as the Atlantic Hurricane Season begins June 1st, and forecasters predict it will be very active.”
The Gulf Coast is dwelling to about half of the nation’s refinery capability, and whereas it’s relatively rare for hurricanes to trigger an enormous decelerate, the chance for a serious occasion is at all times a priority from round June to November.
How a lot may fuel costs fall this summer time?
Denton Cinquegrana, chief oil analyst on the Oil Worth Data Service, says fuel costs may fall 10 to fifteen cents per gallon within the subsequent six weeks.
The longer-term outlook will rely upon climate, but when it “cooperates” Cinquegrana says costs may vary from about $3.35 to $3.50 for the summer time. “That is a big if though,” he cautions.
“In addition to hurricanes, I’d keep an eye on extreme heat and their impact on refinery operations. Refineries are built to run in triple digit ambient temperatures for a handful of days in a row…not 3-4 weeks in a row like last year,” Cinquegrana says.
Patrick De Haan, head of petroleum evaluation at GasBuddy, mentioned in a report Monday that “it’s very likely we’ll continue to see gas prices fall as we approach July 4.” Whereas “the future looks bright for falling fuel prices across the board,” De Haan agrees {that a} unhealthy storm may upend that forecast.
The U.S. Power Data Administration (EIA) mentioned in its outlook final month that fuel costs will common about $3.70 throughout the summer time driving season, which runs from now till September. The EIA forecasts that refinery capacity this summer time will seemingly be greater than the typical over the previous 5 years, however about 3% decrease than the 2019 peak.
Excessive fuel costs are much less of a danger after the summer time months, specialists say. By the top of the yr, fuel costs are forecasted to drop to about $3.40 nationally, in response to the EIA.
Fuel is presently least expensive in Oklahoma ($2.95 per gallon of standard), Mississippi ($2.97) and Arkansas ($2.98). A number of different states may quickly be a part of them under the $3 threshold — like Texas ($3.00) and Louisiana ($3.03).
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