The price of gasoline across the nation remains stuck above $4 per gallon but the Biden administration’s decision to release 1 million barrels of oil per day for six months appears to have halted, for now, the upward pressure on the cost of gasoline at the pump, according to analysts.
The 180 million barrels from the SPR helped send the global oil price drop to near $100 per barrel.
The national average for a gallon of gas is $4.18, which is six cents less than a week ago. However, it is 35 cents more than a month ago, and $1.31 more than a year ago.
Additional price drops coming
The executive order signed by President Joe Biden came as OPEC and its allies announced they would maintain a plan to gradually ramp up production with 400,000 barrels per day monthly increases, which will likely further drop the price of gas.
OPEC’s plans to increase production come as the deal agreed to in 2020 with the Trump administration to cut production for two years comes to an end this month.
In addition, a decline in the demand for gasoline in the U.S. — defying seasonal trends for a third straight week — likely due consumers altering their driving habits due to the high prices, according to AAA.
“The upward push on oil prices caused by Russia’s war in Ukraine is meeting stronger downward pressure from the planned SPR oil release and increased COVID fears in China,” said Andrew Gross, AAA spokesperson. “And lower global oil prices are reflected in falling pump prices for consumers in the U.S.”
According to new data from the Energy Information Administration, total domestic gasoline stocks increased while gasoline demand decreased from 8.63 million barrels per day to 8.5 million barrels per day.
The drop in gas demand, alongside growth in total stocks, contributes to price decreases. If demand continues to decline as gasoline stocks continue to build, the national average will likely continue to move lower.
Source: The Detroit Bureau Read More