The United States is heading toward the Labor Day holiday with the lowest gasoline pump prices for this time of year since 2010.
Sliding demand, the return of refinery units from Canada to Texas and the absence of hurricanes in the Atlantic Ocean have helped swell stockpiles to the highest seasonal level in three years and pushed prices down every day this month. Gasoline may drop another 0.5 cents a day in coming weeks, said Michael Green, a spokesman for AAA, the largest U.S. motoring group.
“There remains enough supply for the demand,” Green said. “Summer trips are ending and many people are headed back to school. You will get a little spurt around Labor Day, but not enough to change things.”
Gasoline is down about 9 cents this month, compared with a 33-cent jump last August, when the largest refinery in Venezuela was shut after a fire and Hurricane Isaac closed refineries along the Gulf Coast. The Energy Information Administration estimates U.S. demand for motor fuel may slip this year to the weakest since 2001 as the economy in the U.S., the world’s largest oil-consuming nation, struggles to gain momentum.
The average pump price was $3.539 a gallon Wednesday, matching the lowest level in a month, AAA said on its website.
Retail prices have fallen along with gasoline futures, which are down 2 percent in August on the Nymex. “We’re at the height of driving season, and stocks are plentiful,” said Stephen Schork, president of the Schork Group, an energy-advisory company in Villanova, Pa. “I would expect stable to slightly declining gasoline prices between now and Labor Day.”
The Atlantic hurricane season is about to enter the most active phase as conditions for the powerful storms improve across the basin. The annual season begins June 1, but the busiest period falls between Aug. 20 and October. Sept. 10 is the statistical peak, according to the National Hurricane Center in Miami.
“It’s still very early in the month, given the fact that hurricanes often come in August,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “But we’re running out of time on the gasoline season. If there is no hurricane and refineries run smoothly, I would expect prices to continue to drop slowly.”