The U.S. Energy Department forecast oil demand in the U.S. and Europe will fall for the second year in a row after the first half of 2012 reflected slower growth than initially expected. Oil stockpiles are at their highest level in 22 years and increased by 2.9 million barrels last week to 387 million barrels.
Manufacturing numbers continue to slide in the U.S., China, and Europe—the world's largest oil consuming countries—and job growth remains minimal. Although global leaders are working to put together an economic stimulus plan, the process is expected to take time and is not likely to cause an immediate spike in fuel costs. A barrel of oil closed Friday at $79.76 on the New York Mercantile Exchange—$4.27 less than the week prior.
"At this point, retail gasoline prices are forecast to continue their decline into the heart of the summer travel season," said Jessica Brady, AAA spokeswoman, The Auto Club Group. "Even if economic stimulus measures are put into place, it's going to take time for a recovery and demand numbers to rebound. While it's not good news that has caused oil and gas prices to fall, it does provide relief to motorists who expected to pay $4 or more for a gallon of gas this summer."
The national average price of regular unleaded gasoline is $3.42, 8 cents less than last week. Georgia’s average of $3.21 decreased 5 cents from last week, Florida’s average of $3.26 fell 6 cents, and Tennessee’s average price of $3.10 dropped 7 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: