AAA Mid-Atlantic reports that after an unrelenting two-month run-up, gasoline prices finally turned the corner last week and started going down. In Baltimore, the average price of a gallon of unleaded dropped 4 cents -- from $2.60 to $2.56.
Just in time for the Fourth of July weekend. Read the full release below.
After a 54-day run up in gas prices, motorists welcomed a much-anticipated decrease at the gas pump this week. Gas prices began their retreat on Monday and continued to fall for five consecutive days through Friday. The average U.S. retail price for regular grade gasoline dropped to $2.66 a gallon on Friday, down 3 cents from a week ago, but still $1.42 below the record price of $4.114 set last July.
Crude oil fell below $70 early in the week, rose to just under $71 mid-week upon news of Nigeria’s supply disruptions and as equity markets rallied on perceptions the global recession was easing, then fell back below the $70 mark in Friday trading to settle at $69.16 at the market’s close. Following late week increases, crude oil is on course for a 4% gain this month. Optimism for potential economic recovery boosting weak oil demand has lifted crude oil prices from below $40 a barrel over the past three months, yet they are still less than half their record peak of $147 a barrel set last July.
The Energy Information Administration (EIA) reported U.S. crude oil stocks fell 3.8 million barrels, while U.S. gasoline stockpiles rose 3.9 million barrels to 208.9 million, exceeding analysts’ predictions. Stocks of distillates, such as diesel and heating oil, have risen to 10-year highs due to the recession. The EIA also reported gasoline demand dropped 225,000 barrels a day to 9.129 million. The one-week slide in gasoline demand suggests that higher prices have tempered motorists’ enthusiasm during the summer driving season.
“After nearly two months of daily gas price increases, we are finally seeing a little relief at the gas pumps, which motorists are welcoming just in time for the holiday weekend,” said Ragina C. Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Although AAA expects long distance travel will be moderate for this holiday, declining gas prices could prompt more people to make last minute decisions to hit the road.”
The Week Ahead
Although gas prices are about $1.47 below last summer’s record highs, AAA is projecting Fourth of July travel will see a dip this year. The number of Americans hitting the road for the Independence Day holiday weekend will decrease by about 2.6% from 2008. AAA forecasts about 37.1 million travelers will travel 50 or more miles from home, compared with about 37.8 million 2008. The decrease in holiday travel is attributed to uncertainty about the strength of the economy, as well as rising unemployment and sagging household incomes.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
6/28/09 Week Ago Year Ago
National $2.64 $2.69 $4.07
Maryland $2.59 $2.78 $4.03
Baltimore $2.56 $2.60 $4.01
Cumberland $2.65 $2.66 $3.98
Hagerstown $2.60 $2.62 $4.00
Salisbury $2.49 $2.52 $3.94
Washington Suburbs (MD only) $2.61 $2.64 $4.08
Crude Oil $69.16 per barrel (close on Friday) $69.55 per barrel $141 per barrel