After weeks of watching the price at the pump tick up, it appears that things have finally leveled off.
Citing record domestic oil production, seasonal declines in demand, and a sell-off in the energy sector on Wall Street, gas prices are on a downswing, the American Automobile Association said.
“Fuel prices plunged on the stock market last week, which should clear the way for a significant discount at the pump,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “Motorists should see a 5-10 cent drop or more in the next 10 days. This is the type of downward movement we normally see at the pump during the fall. However, upward pressure could easily return later this month, as the market braces for U.S. sanctions against Iranian crude, and what that might mean for global supply and demand.”
On Monday, the national average two cents to $2.89 per gallon. Locally, prices also fell with the average in Fort Myers dropping three cents to $2.75 per gallon, while Naples saw a one cent drop to $2.82 per gallon. Statewide, the average fuel price dropped to $2.79 per gallon.
According to AAA, domestic crude production hit an all-time high of 11.2 million barrels per day, referencing a recent report from the U.S. Energy Information Administration, while supply rose another 1.5 percent. Oil prices started the week at $71 per barrel thanks in part to the sell-off on Wall Street last week.
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There are still some concerns over where the long-term will see gas prices go, however. Ongoing concerns over renewed sanctions on Iran, plus new concerns over the disappearance of an American journalist in Turkey as some sources place the blame on Saudi Arabia, which could lead to significant tension, says GasBuddy’s head of petroleum analysis Patrick DeHaan.
“[E]vents in Saudi Arabia bear monitoring as the West claims the Kingdom is behind the disappearance of a Washington Post journalist and could rile tensions between the world’s largest oil consumer and one of the world’s largest oil producers,” DeHaan said. “I believe gas prices in most areas East of the Rockies will drift lower, but keep an eye out on these new developments. I don’t know that I’ve ever seen autumn so rife with possible volatility at the pump as we’re seeing now.”
One concern that was avoided was on the impacts of Gulf oil production by Hurricane Michael, which slammed into the Florida Panhandle last week. The effects of Michael, devastating to many in northern Florida, have been minimal for the rest of the nation, as fuel woes are similar to those experienced locally after last year’s Hurricane Irma – getting supplies to the area hardest hit.
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Source : https://naplesherald.com/2018/10/15/gas-prices-fall-after-weeks-of-increases-as-production-hits-record-high/866