After spending more than a month above $4 per gallon, the national average price for regular unleaded gasoline will complete one week below that psychological threshold this weekend. As of this morning, the national average price was $3.898, according to AAA and the Oil Price Information Service (OPIS), down 21.6 cents from it record high of $4.114 on July 17. Diesel fuel averaged $4.686 per gallon this morning, after peaking at $4.845 on July 17.
Several analysts attribute the price dip, in part, to a drop in consumer demand, along with a softening in light crude oil futures pricing. Oil futures pricing for July opened at $137 a barrel June 9 on the New York Mercantile Exchange, the Monday after gas topped $4 per gallon nationally. In contrast, September futures pricing for light crude stood at $125 per barrel today on the NYME.
Consumer demand is down because American motorists have curtailed their driving habits this summer, normally the heaviest traveling months of the year. U.S. motorists drove 9.6 billion fewer miles in May than the previous year, according to the Federal Highway Administration (FHA). It is the largest drop for any May on record and is significant because it includes Memorial Day numbers, which traditionally kick off the summer driving season.
Three of the largest single-month declines — each dropping 9 billion miles — have occurred since December, the FHA reported.
Travel on all public roads fell 3.7 percent in May, year over year, marking a decline of 29.8 billion fewer miles traveled in the first five months of this year compared to the same period last year, the FHA said.
Despite an increase in mass transit use, carpooling and other transportation alternatives, Americans spent $96 million more per day on fuel in June than in May, according to the OPIS Transportation Fuel Index, marking an increase of $367 million per day more than a year ago.
OPIS attributed the higher costs almost entirely to the escalation in the price of crude. The average retail gasoline price in June was 60.4 cents per gallon higher than the average wholesale price, compared to 60.4 cents in May. Approximately 45 cents per gallon of the mark-up is attributable to federal, state and local taxes, OPIS reported.
In all, 12 states and the District of Columbia currently have average gas prices higher than $4 per gallon. That is in stark contrast to July 11 when 35 states and the District of Columbia were above the $4 mark. In addition, 12 states have fuel averages below $3.80, compared to none on June 9.
Alaska tops the nation for regular unleaded, averaging $4.646 per gallon. The state also has the highest averages for mid-grade and premium gas, hitting $4.824 and $5.074, respectively. Alaska is the only state with a premium average price above $5 per gallon. Three states — Alaska, Hawaii and New York — remain above the $5 mark for diesel fuel, with Hawaii being the most expensive at $5.402 per gallon.
Oklahoma has the lowest gas price in the nation, averaging $3.625 per gallon for regular unleaded. It is joined by Minnesota ($3.652), Missouri ($3.662) and Ohio ($3.669) as the only states under $3.70 per gallon.