Aided by temporary concerns about a weaker economy, oil and gasoline futures both took a beating this week. After closing out last week near $82, oil saw massive declines of near 9% to $75/bbl. Even a less than stellar Department of Energy report couldn't push oil higher. In fact, it seemingly accelerated the decline.
Turning to what this means for motorists... decreasing gasoline prices! The U.S. average peaked on August 6 at $2.787 and has slowly begun to drop. According to live GasBuddy numbers, that price is currently $2.775. While that doesn't amount to a whole lot, expect prices to begin dropping faster this weekend.
Due to different pricing strategies, I expect prices on the West Coast will fall the slowest. On the flip side, prices in the Great Lakes area will fall fastest, with prices in Indianapolis already approaching low $2.40's. Average prices in Michigan, Indiana, Ohio, and Minnesota could drop as much as 5-10 cents over the weekend while prices in the rest of the country drop half that- some 2-5 cents per gallon.
Overall, don't expect the low prices to stick around too long. The University of Michigan Consumer Sentiment report came out today showing consumers more upbeat, which may be translated into consumers spending, thus fueling the economy, thus increasing demand for gasoline. Not to mention tropical storms- at least its quiet in the Atlantic for now, but that can quickly change.
We'll keep an eye on all the factors over the weekend. Keep an eye on our
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