(WASHINGTON, May 21, 2012) To begin 2012, as the national average gas price set new seasonal highs and the price at the pump rose for 65 of 70 days from the end of January through the beginning of April (from $3.38 to $3.94), motorists across the country felt increasingly squeezed in their pocketbooks and gas price headlines suggested that a $4 national average for gasoline was a foregone conclusion heading into the summer driving season.  Only days before the busy Memorial Day travel weekend, the 34.8 million Americans who AAA estimate will travel 50 miles or more from home during the holiday are feeling some welcome relief as they fill up for their holiday travel.  The national average retail price of gasoline not only failed to reach $4 per gallon but is nearly 20 cents cheaper than the same time last year.

As crude oil prices have declined and global economic concerns have resurfaced the national price of gas at the pump has also fallen. Since the year-to-date peak price of $3.94 on April 6, the national average has fallen for 41 of 45 days and decreased 25 cents during this period.  Although the national average price has steadily fallen, this decline has been led by states east of the Rocky Mountains, while those west (including Alaska) have in fact seen prices rise during the last month.  Rising prices in this region have been driven by dwindling gasoline supplies and refinery shutdowns and maintenance.  While the month-over-month price increases have been minimal in Nevada (0.1 cent), Montana (0.4 cents), Utah (2.5 cents), and Idaho (3.3 cents), the increases on the coast have been more pronounced: California (14.1 cents), Washington (12.6 cents), and Oregon (15.8 cents).

Today’s national average price for a gallon of regular self-serve gasoline is $3.69.  This is four cents cheaper than the price one week ago, 18 cents cheaper than one month ago and also 18 cents cheaper than one year ago.

At the close of today’s formal trading on the NYMEX, West Texas Intermediate (WTI) crude oil settled up $1.09 at $92.57 per barrel.  This slight price increase came following a week where the price of WTI declined each day and closed the week at the lowest price since October 26, 2011.  These losses have been led by increasing global economic concerns — most notably Greek sovereign debt issues impacting the euro zone and data suggesting a slowing Chinese economy — as well as further reports from Saudi Arabia that the Organization of the Petroleum Exporting Countries (OPEC) would increase production to achieve a “fair” price for Brent crude of near $100 per barrel. These reports come following worries that current high prices may be impacting global economic growth.  Based on the current price difference or “spread” between WTI and Brent this would mean a price for WTI in the mid-eighties.  OPEC members account for approximately 44% of global production capacity and by coordinating an increase in production could put downward pressure on global oil prices.