There is downward pressure at the gas pump, but not to the point that many motorists will notice, according to the latest fuel report from AAA.
Gas prices are declining by fractions of a penny per day. However, that does add up over time. During the past week, the average price for a gallon of regular unleaded declined 2 cents in Florida and Georgia, and 1-cent in Tennessee.
"Gas prices are beginning to follow that downward trend we are used to seeing in January, as gasoline demand typically hits its lowest point of the year," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "It's possible prices could slip another 5-10 cents by the end of the month, but continued volatility in the price of oil could play spoiler."
Last week, WTI averaged $52.08 a barrel - $1.28 less than the week before. The oil market remains heavily focused on the OPEC production agreement. This agreement is the main reason crude oil is priced more than $20 higher than this time last year, which lead to more expensive prices at the pump. Last week, the OPEC Secretary-General made a statement that he is confident that the cartel can keep their production cut agreement as determined last November. Under the accord, OPEC, Russia and other non-members of the producer group will curtail oil output by nearly 1.8 million barrels per day for six months.
An OPEC meeting to monitor compliance will be held in Vienna on January 22. The objective of the meeting will be to decide what level of compliance would be acceptable in an effort to keep all countries participating. Traders will watch closely how OPEC and non-OPEC members continue to implement cuts and if compliance will continue. Any suspected cheating could push oil and gasoline prices lower.
