Aug. 25 (UPI) — A slump in crude oil prices brought some modest relief to consumers by way of lower gasoline prices, though AAA said the downturn might not last.
AAA on Friday put the national average retail price at $3.83 for a gallon of regular unleaded gasoline, about 5 cents less than this time last week. The price at the pump is largely a result of crude oil prices, which were pressured this week by a downturn in economic sentiment.
The U.S. housing market is facing severe headwinds and recent data on manufacturing points to an economic contraction. Though rallying in early morning trading, West Texas Intermediate, the U.S. benchmark for the price of oil, is headed toward a 1% loss on the week.
With Labor Day approaching, however, a surge in demand could cause the market to pivot.
“Although the national average did a U-turn this week, the road ahead could lead to higher prices,” said Andrew Gross, a spokesperson for AAA. “Ongoing concerns regarding potential storm activity could hinder falling pump prices this fall.”
The week started with five storms spinning in the waters of the Atlantic Ocean, though the situation had calmed considerably by Friday. Of what’s left, only Tropical Storm Franklin remains serious. That storm is expected to develop into a hurricane during the weekend as it moves along the Eastern U.S. seaboard.
Data this week from the Energy Department showed demand remains resilient, albeit somewhat sluggish. The total amount of gasoline sent to the market increased slightly, by around 1.3% compared to year-ago levels, but so too did production.
Even with the modest relief at the pump, prices are within 5 cents of matching year-ago levels.
