The month of June has brought some much-needed relief for drivers at the pump, and the trend seems to be continuing.
On Monday, the average fill-up in Naples ran $2.79 per gallon according to the American Automobile Association. That’s down four cents in the past week. Meanwhile, drivers in Lee have seen declines of seven cents per gallon on average in the past week, falling to $2.69 per gallon on Monday.
Florida’s statewide average dropped a nickel to $2.75, well below the national average of $2.90 per gallon.
Analysts say that the decline is in part due to record domestic oil production – nearly 11 million barrels per day, and the belief that a longstanding production cut put in place by OPEC members and OPEC allies including Russia are set to expire at the week’s end.
“Pump prices should sink even lower this week, after wholesale gasoline prices took a dive,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “There is now firm downward pressure on the oil market as it appears increasingly likely that OPEC will agree to ease production cuts. As a result, gas prices are poised for another 5-10 cent drop.”
OPEC put the cuts in place in December 2016, the cartel has a scheduled meeting on Friday to remove the cuts.
“While many are still bitter over having to pay more than last year, prices certainly could have moved higher if there hadn’t been pressure on OPEC to act now that the (previous) glut of crude oil has been absorbed into the market,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “We see gas prices falling slightly into late June or early July before odds rise of hurricane season leading to some volatility at the pump, which could lead prices higher short term.”
Not everyone is on board with the idea that the downward trend will continue. While domestic oil production is at an all-time high, so too is gasoline demand, while inventories on the decline, according to recent data from the U.S. Energy Information Administration. Those two factors could but the brakes on any further drops.
If demand continues to strengthen and inventories decrease in the weeks ahead, motorists can expect gas prices do a reversal and start to increase again,” said Jeanette Casselano, AAA gas price expert. “AAA expects the national gas price average to range between $2.85 and $3.05 through Labor Day, likely seeing the summer’s highest prices in June.”
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