Gas prices are on the decline after dropping 2 cents in Florida, and 4 cents in Georgia and Tennessee during the past week. The daily average price for a gallon of gasoline is $2.23 in Florida, $2.17 in Georgia, and $2.04 in Tennessee. These state averages are more expensive than this time last year, by 13 cents in Florida and Georgia, and 11 cents in Tennessee.
"The pump-price dip is tied to declining demand and reduced prices of crude oil and wholesale gasoline," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "Gulf Coast refiners are coming back from autumn maintenance, so some more modest wholesale price relief may occur, which would bring continued relief at the pump."
Last week, the Energy Information Administration reported that gasoline demand was about 370-million gallons per day. During the summer driving season, EIA reported levels at more than 411-million gallons per day. These numbers show that we are beginning to see the typical drop in consumption that occurs every fall.
State averages have more room to fall if they are to catch up with last year's gas prices. Although gas prices fluctuated from November 1 - December 31, 2015, the average price for gasoline largely followed a downward trend:
- Florida - declined a total of 9 cents from $2.09 to $2.00
- Georgia - declined a total of 14 cents from $2.05 to $1.01
- Tennessee - declined a total of 18 cents from $1.93 to $1.76
- During this period, the price for WTI crude oil averaged $40 a barrel, with daily settlements ranging from $47.90 - $34.73
The price of crude oil trended lower last week, falling from $50.52 on Monday to $48.70 on Friday. The weekly average of $49.62 is the lowest in three weeks. The price of crude will have to fall much lower for motorists to see pump prices decline to last year's levels. However, analysts say it is possible, depending on the outcome of a scheduled OPEC meeting on November 30.
In late September, OPEC's 14-member group reached a preliminary agreement to cap output to a range of 32.5 million to 33 million barrels of oil per day, in attempt to curb global oversupply. However, OPEC officials met in Vienna last week to work out the details of their plan, but failed to reach an agreement. Oil prices are now trending lower amid real concerns that producers could walk away from the November meeting without reaching an agreement. If that happens, analysts believe oil prices could easily follow last year's trends, and gas prices would do the same. Until then, motorists should not expect any major upward shifts in prices at the pumps.
