Lower crude prices also contribute to the falling national average.
WASHINGTON, D.C. — As demand continues to fall, U.S. drivers are experiencing further relief at the pump.
The national average for a gallon of regular gasoline declined to $4.52 as of July 18, prompted by lower domestic demand for fuel and a significantly lower global price for crude oil.
The cost of a barrel of oil has dropped to the mid-$90s, plummeting from approximately $110 two weeks ago, reported AAA.
"Global economic headwinds are pushing oil prices lower and less expensive oil leads to lower pump prices," said Andrew Gross, AAA spokesperson. "And here at home, people are fueling up less, despite this being the height of the traditional summer driving season. These two key factors are behind the recent drop in pump prices."
The U.S. Energy Information Administration (EIA) reported that gas demand dropped from 9.51 million barrels per day to 8.06 million barrels per day last week. At the same time, total domestic stocks increased by 5.8 million barrels per day.
The combination of a decrease in demand and declining oil prices have helped to push fuel prices down. Drivers are likely to see continued relief at the gas pump while these supply and demand dynamics hold.
The current national average of $4.52 per gallon is 46 cents less than a month ago and $1.36 more than a year ago.
The top 10 largest weekly price decreases occurred in Washington, D.C. (21 cents per gallon), Ohio (20 cents), Texas (19 cents), Arizona (19 cents), California (19 cents), Wisconsin (19 cents), Oklahoma (19 cents), Kentucky (19 cents), Michigan (18 cents) and Tennessee (18 cents).
The top 10 least expensive markets in the country are South Carolina ($4.02 per gallon), Texas ($4.03), Georgia ($4.03), Mississippi ($4.04), Louisiana ($4.07), Alabama ($4.09), Tennessee ($4.10), Arkansas ($4.11), North Carolina ($4.17) and Kentucky ($4.18).
This week marks several weeks in a row of declining gas prices after the national average hit an all-time high of $5.01 per gallon in June. While experts previously cautioned that the initial dip might prove to be temporary as the summer driving season got into full swing, even a period of robust holiday travel over the Independence Day weekend failed to push prices at the pump back up.
The primary reason was simple: cheaper crude oil, the main ingredient in gasoline.
"Less expensive oil usually means less expensive gas," Gross said.
At the close of the formal trading session on July 15, West Texas Intermediate increased by $1.81 to $97.57. Crude oil prices increased slightly toward the end of the week based on the market's expectation that crude supply will remain tight throughout the summer.
Tightening of crude oil supply is being driven by the potential for slower economic growth based on rising interest rates and inflation. Declining crude demand, due to reduced economic activity, could lead prices to follow suit, according to AAA.
Additionally, the EIA noted that total domestic crude oil stocks increased by 3.3 million barrels to 427.1 million barrels last week. This is nearly 11 million barrels lower than the storage level last year.