The national average for a gallon of gas fell to $4.21, down 14 cents since last week. But a slight uptick in gas demand as more people fuel up could end the steady drop in daily pump prices.
“We know that most American drivers have made significant changes in their driving habits to cope with high gas prices,” said Andrew Gross, AAA spokesperson. “But with gas below $4 a gallon at nearly half of the gas stations around the country, it’s possible that gas demand could rise.”
According to new data from the Energy Information Administration (EIA), gas demand increased from 8.52 million b/d to 9.25 million b/d last week. The estimated rate is 80,000 b/d lower than last year, but it could slow pump price decreases if the trend holds. Additionally, total domestic gasoline stocks decreased by 3.3 million bbl to 225.1 million bbl, signaling that higher demand reduced inventory last week.
New survey data from AAA finds that drivers are making significant changes to cope with high pump prices. Almost two-thirds (64%) of U.S. adults changed their driving habits or lifestyle since March, with 23% making “major changes.” Drivers’ top three changes to offset high gas prices are driving less, combining errands, and reducing shopping or dining out.
Today’s national average of $4.21 is 63 cents less than a month ago and $1.04 more than a year ago.
The nation’s top 10 largest weekly decreases: Colorado (−22 cents), Kansas (−22 cents), Ohio (−22 cents), Nebraska (−21 cents), Indiana (−21 cents), Michigan (−20 cents), Iowa (−20 cents), Illinois (−19 cents), Oklahoma (−19 cents) and Arizona (−19 cents).
The nation’s top 10 least expensive markets: Texas ($3.71), South Carolina ($3.73), Georgia ($3.76), Oklahoma ($3.77), Arkansas ($3.77), Mississippi ($3.77), Tennessee ($3.78), Alabama ($3.78), Louisiana ($3.82) and Kentucky ($3.83).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI increased by $2.20 to settle at $98.62. Crude prices increased last week as market concerns about weakening demand this summer eased after the EIA reported that total domestic crude stocks decreased by 4.5 million bbl to 422.1 million bbl last week, 13.5 million bbl lower than the storage level at the end of July 2021.
Additionally, crude prices rose after the market adjusted its expectations for supply since the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group also known as OPEC+, will most likely announce its output will remain unchanged for September at its videoconference meeting on August 3.
For this week, amid an unlikely supply increase from OPEC+, persistent supply concerns could boost the cost of crude oil.