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AAA: Cheaper crude oil leads to cheaper pump prices

Austin-area gas prices dip again this week

June 06, 2019 - 8:03 am
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AUSTIN (Talk1370.com) -- Prices at the pump continue to dip slightly, but analysts say it's a volatile situation that could change at any time.

The average price for a gallon of regular unleaded gasoline across the Austin area is $2.43 this week, according to AAA Texas. That's down five cents from a week ago and 29 cents cheaper than this time last year.

Statewide, the average is down six cents to $2.45; that's 31 cents cheaper than a year ago. Drivers in McAllen are seeing the state's cheapest gas prices this week, at an average of $2.25 per gallon; Midland continues to have the state's most expensive average at $2.70.

The national average price for a gallon of regular unleaded is $2.78, which is four cents less than this day last week and 16 cents less than the price per gallon at this same time last year.

Daniel Armbruster with AAA Texas says the price of West Texas Intermediate crude oil is a sign of what's happening with pump prices - representing nearly 60% of the price drivers see at the pump. This year's peak for WTI crude has been $65 a barrel, while prices have recently dropped as low as $51 a barrel. That's compared to last summer when prices ranged between $65 and $73 per barrel.

"With most refineries operating at normal levels, demand at robust rates, and cheaper crude oil prices, summer gas prices are poised to remain lower than last year," Armbruster said. "Texans are paying 31 cents less per gallon, on average, for regular unleaded gasoline compared to this time last year. However, as Texans settle into summer, many outliers could pave the way for unexpected price bumps, so stay tuned."

For domestic gasoline demand, summer 2019 has been forecasted to reach some of the highest levels on record in the U.S. Meanwhile, domestic gasoline stocks are at their lowest level going into June since 2016. If demand rises while gasoline stocks remain low, pump prices could see modest increases, especially if supply is tight in local markets. On the other hand, gas demand could fall, as we’ve seen in recent weeks due to inclement weather from the Rockies to the Midwest and South.

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