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Aug. 25 (UPI) — Lower crude oil prices have provided some relief to consumers through reduced gasoline prices. However, AAA cautions that this downward trend may not last long.
AAA reported on Friday that the national average retail price for a gallon of regular unleaded gasoline is $3.83, which is approximately 5 cents lower compared to last week. Gasoline prices at the pump are primarily influenced by crude oil prices, and the recent economic sentiment decline has put pressure on them.
The U.S. housing market is currently facing significant challenges, and recent manufacturing data indicates an economic contraction. Although West Texas Intermediate, the U.S. benchmark for oil prices, experienced a slight rally in early morning trading, it is expected to record a 1% loss for the week.
However, with Labor Day approaching, a surge in demand may lead to a market shift.
“Although the national average has decreased this week, there is a possibility of higher prices in the future,” said AAA spokesperson Andrew Gross. “Ongoing concerns regarding potential storm activity could hinder falling pump prices this fall.”
At the start of the week, there were five storms in the Atlantic Ocean, but by Friday, the situation had significantly calmed. The only remaining serious threat is Tropical Storm Franklin, which is predicted to strengthen into a hurricane over the weekend as it moves along the Eastern U.S. seaboard.
This week, data from the Energy Department revealed that demand remains resilient, albeit slightly sluggish. Gasoline supply to the market increased by about 1.3% compared to last year, but so did production.
Despite the slight relief at the pump, prices are still within 5 cents of matching last year’s levels.
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