(WASHINGTON, June 11, 2102) Today’s national average price for a gallon of regular self-serve gasoline is $3.54.  This is five cents cheaper than the price one week ago, 19 cents cheaper than one month ago, 17 cents cheaper than one year ago, and 40 cents cheaper than the year-to-date peak price of $3.94 in early April.  With the exception of May 16, when the national average increased by five-hundredths of a penny, as rising prices in the supply-strapped West Coast briefly outweighed falling prices across the rest of the country, the national retail price of gasoline has fallen for 55 of the last 56 days.

The multi-month slide in gas prices has been largely the result of bearish global economic news and declining crude oil prices, which have fallen more than $20 per barrel since the beginning of May.  As a general rule-of-thumb, a $1 per barrel decline in crude oil prices results in a decline in gas prices of about 2.5 cents per gallon.  However, these lower gas prices at the pump usually lag cheaper crude prices by a week or two, as the less-expensive crude oil makes its way through the supply chain to consumers.  With a 40-cent decline to date in the national average pump price since the April 6 peak, there is some reason to suspect that there is additional room for gasoline prices to move lower on the recent aforementioned decline in crude oil prices of more than $20 per barrel.

The last month has seen gas prices fall in much of the U.S., however a number of states west of the Rocky Mountains saw prices rise in May as refining concerns and tightening supply put upward pressure on gas prices in that region.  The past week has seen much of this upward pressure removed, with many of these states registering declines of more than a dime on the week and only two states now registering a month-over-month price increase: Utah (2.6 cents) and Washington State (0.3 cents).  The highest state-average gas price in the nation is Washington State at $4.16 per gallon.  The lowest price is South Carolina at $3.13.

West Texas Intermediate (WTI) crude oil prices increased 87 cents last week, after declining for each of the five consecutive weeks prior.  Prices rallied to settle above $85 per barrel last Wednesday but concerns surrounding the global economy — particularly as they relate to euro zone sovereign debt issues — and a stronger U.S. dollar returned to weigh on the market to end the week.  A weaker global economy would be expected to consume less crude oil, which puts downward pressure on prices.  Additionally, because oil futures are traded in U.S. dollars, as the dollar strengthens against foreign currencies, these futures become relatively more expensive to purchase and are a less attractive investment. 

Crude prices moved higher to begin today on the weekend’s news that European finance ministers had agreed to loan Spain 100 billion euros ($125 billion) to address the country’s debt issues, however these gains were reversed this afternoon as optimism from the so-called “Spailout” faded and focus returned to the broader bearish global economic sentiment that has permeated the market.

At the close of today’s formal trading on the NYMEX the price for WTI crude oil had decreased $1.40 to settle at $82.70 per barrel.  This is the lowest settlement price for WTI crude since October 6, 2011.