Pump prices are expected to continue their decline even as Hurricane Sandy threatens the East Coast.
Ample supply numbers and contracting demand pushed oil prices to a three-month low last week. U.S. oil supplies jumped almost 6 million barrels last week to 375 million barrels, the highest level for this time of year since 1982, according to the Energy Department. While production holds at a 17-year high, gasoline consumption dropped to its slowest rate since March.
Weak demand in the U.S. is not solely responsible for the drop in oil prices. Fuel demand in Europe remains weak with Spain's unemployment rate at 25 percent and the euro area at 11.4 percent unemployment, according to the National Statistic Institute.
"While motorists would expect gas prices to surge with Hurricane Sandy headed for the East Coast, the storm has not yet caused prices to spike," said Jessica Brady, AAA spokeswoman, The Auto Club Group. "Despite Sandy, retail gas prices are forecast to fall further this week and the downward trend is expected to continue into the Thanksgiving holiday."
A barrel of oil settled Friday at $86.28 on the New York Mercantile Exchange--$3.77 less than the week prior.
The national average price of regular unleaded gasoline is $3.55, 13 cents less than last week. Florida’s average of $3.52 and Tennessee’s average of $3.32 both dropped 12 cents from last week. Georgia’s average price of $3.41 also decreased 13 cents from last week, respectively. Visit AAA’s Daily Fuel Gauge Report to find national, state, and local metro market retail gasoline prices.
Current and past gas price averages: National: