Drivers could see gas prices rise in the second half of summer: AAA

Demand for gas has dropped dramatically, but prices are still rising, according to AAA. (iStock)

Demand for gas dropped following the big holiday weekend, but prices at the pump have yet to follow, AAA said. 

The national average cost for a gallon of gas increased by three cents from last week at $3.55, despite a drastic drop in demand, according to the latest report from AAA.  

Gas demand dropped to 8.76 million barrels a day from 9.6 million last week as domestic gasoline stocks stayed flat at 219.5 million barrels of crude oil, according to Energy Information Administration (EIA) data. 

A surge in oil prices is outweighing the effect that a drop in demand would typically have on has prices, according to AAA. The cost for a barrel of oil surged by 92 cents to settle at $75.75 per barrel, AAA said. 

“Gas demand has fallen nearly 10 percent since the holiday, as folks have returned to their day-to-day driving routines,” AAA spokesperson Andrew Gross said. “Typically, this would lower gas prices, but such a move is being countered for now by the increasing cost for oil, the main ingredient in gasoline.”  

If oil prices continue to rise, pump prices are likely to follow, according to Gross.

If you’re trying to lower your overall auto costs, you could consider switching auto insurance providers. Visit Credible to compare quotes from different companies without affecting your credit score.

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Gas inventories drop, GasBuddy says

Falling inventories are also contributing to the rise in gas prices, according to a report from GasBuddy.  

Gasoline inventories are down 5.5 million barrels or 2.4% lower than a year ago and are 7% below the five-year average for this time of year, according to GasBuddy. The Gulf Coast region saw the most significant drop of 1.6 million barrels, while the West Coast registered the biggest increase of 1.4 million barrels.

“It’s important to note which regions saw increases/decreases as this information likely drives prices up (in the case of falling inventories) or down (in the case of rising inventories),” Patrick DeHaan, GasBuddy head of petroleum analysis, said.

Another factor that could impact where gas prices head this summer is the weather, according to DeHaan. 

“I don’t see much chance of a major break out of the tight range we’ve held since April, but there is rising risk for hurricane season and potential disruptions as major forecaster Colorado State University released its third forecast for the 2023 hurricane season, showing a sharp uptick in the number of expected major hurricanes,” DeHaan said in a separate statement. “Heading into the prime of summer gasoline demand, any disruptions, whether storms or unexpected outages and what might be a small challenge outside of the summer driving season, could be a larger problem, so there is some risk to gas prices going into the second half of summer.”

One way to save on summer expenses is by lowering the amount you spend on car costs. If you are looking to save money on your car costs, you could consider changing your auto insurance provider to get a lower monthly rate. Visit Credible to shop around and find your personalized premium without affecting your credit score.

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Falling gas prices big reason why inflation is normalizing

Inflation slowed to 3% in June — its lowest level in two years and a major contributing factor to the steady dip in gas prices, according to data reported by the Bureau of Labor Statistics (BLS). Gas prices have dropped 26.5% annually, and the energy index is down 16.7% over the last 12 months.

Despite the drop in gas prices, other costs tied to car ownership are rising. For example, car insurance rose 16.9% year-over-year, and auto maintenance and repair fees increased 13%.

If you are looking to save money on your auto costs, you could consider changing your insurance provider to get a lower monthly rate. Visit Credible to shop around and find your personalized premium without affecting your credit score.

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