Arkansas and U.S. motorists will likely see pump prices continue to move lower for the rest of the year, and may well see local gas prices ratchet down near the two dollar level ahead of the holiday season, according to the U.S. Energy Information Administration’s short-term energy outlook released Tuesday (Aug. 11).
The U.S. Department of Energy’s statistical arm forecasted that it expects monthly average gasoline prices to decline from their July level to an average of $2.11 per gallon in the fourth quarter, a decline of nearly 46 cents from today’s average of $$2.58 per gallon to fill up at most stations across the U.S.
At the same time, the national average price for regular unleaded gasoline has fallen for 27 consecutive days, the longest streak of consecutive declines since January, according to the American Automobile Association (AAA).
Overall, pump prices have moved lower by 19 cents per gallon over this period, and U.S. motorists are saving six cents per gallon week-over-week, and 17 cents per gallon month-over-month. Today’s average price is also 89 cents per gallon lower than this same date last year.
Last week, AAA officials predicted that the gas price decline would accelerate in August as crude oil prices continue to move lower and refinery problems that hit the market earlier this summer have not been resolved.
“It feels good to see gas prices drop during the middle of the busy summer driving season,” said Avery Ash, AAA spokesman. “Millions of people are hitting the roads right now and these gas savings should make their trips more affordable.”
If the EIA’s $2.11 per gallon prediction for U.S. gas prices holds up in the fourth quarter, pump prices in Arkansas will likely be near two dollars if the state’s recent trend of being 10 to 20 cents cheaper than the national average continues.
For example, motorists across the state are paying an average of $2.31 per gallon to fill up their tank across the state, some 17 cents cheaper than the national average, according to AAA. Pump prices in the state’s metropolitan areas range from a low of $2.26 per gallon in the Ft. Smith area to a high of $2.33 per gallon in Pine Bluff and the Fayetteville-Springdale-Rogers area.
Motorists on both sides of the Texarkana state line are seeing prices at an average of $2.29 per gallon, and to the Little Rock-North Little Rock metropolitan area are paying an average of $2.30 a gallon to fill up their tanks.
Drivers choosing to fill up the tanks with a higher-grade of gasoline should expect to pay an average premium of $2.78 a gallon across the state. Big rig drivers and other diesel fuel users will see pump prices at about $2.48 a gallon, down a whopping $1.23 per gallon from a year ago.
Here are additional highlights of the EIA’s short-term energy outlook (STEO):
· North Sea Brent crude oil prices averaged $57 per barrel in July, a $5 decrease from June. Brent crude oil spot prices fell further in early August, settling at $48 per barrel on Aug. 7. The recent price declines reflect concerns about lower economic growth in emerging markets, expectations of higher oil exports from Iran, and continuing actual and expected growth in global inventories, the EIA said. The Department of Energy forecasting group predicts that Brent crude oil prices will average $54 barrel in 2015 and $59 per barrel in 2016, $6 and $8 lower than in last month’s STEO, respectively. Prices for West Texas Intermediate (WTI), the U.S. benchmark crude, are expected to average $5 a barrel less than Brent in both 2015 and 2016.
· Natural gas working inventories were 2,912 billion cubic feet (Bcf) on July 31, 23% higher than a year earlier and 2% higher than the previous five-year average (2010-14). EIA projects inventories will close the injection season at the end of October at 3,867 Bcf, which would be the second-highest end-of-October level on record.
· U.S. regular gasoline monthly retail prices averaged $2.79 per gallon in July, a decrease of one cent per gallon. EIA forecasts U.S. regular gasoline retail prices to average $2.41 per gallon for all of 2015.
At the close of trading Tuesday on the New York Mercantile Exchange, West Texas crude futures fell $1.88, or 4.2% to $43.08. That is the lowest settlement price for light, sweet crude since March 2009. Brent crude, the global benchmark, fell $1.23, or 2.4%, to $49.18 a barrel on London’s ICE futures exchange.