Dip in Global Oil Demand Lowers Gas Prices

The end of summer driving season has helped drive down global demand.

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The end of summer means flip-flops will soon be relegated to the depths of the closet or for use as props in political attacks. But the change in season also brings good news for drivers around the country: cheaper gasoline.

The average price for regular retail gas is at $3.47 per gallon, which is about 10 cents lower than a week ago and 14 cents below the price a month ago, according to the AAA Daily Fuel Gauge Report. Indeed, national gas prices are the lowest since March, partially due to the dropping global price of oil and the end of the U.S. summer driving season.

[See a roundup of political cartoons on gas prices.]

Slow economic growth around the world, especially in the United States, Europe, and even China, has pushed down both the demand for and the price of crude oil, a major component of gasoline, says Neil Gamson, an energy forecast expert at the U.S. Energy Information Administration. "The economic growth outlook has not been as optimistic as it was several months ago," he says. "That has slowed down the growth in the demand for the oil, and as a result, it has put less pressure on prices."

[Read more about how global economic problems could mean lower gas prices.]

In recent days and weeks, uncertainty over the European economy has created volatility in world's oil prices, but the longer-term outlook for slow growth should keep demand for oil lower. The Department of Energy is scheduled to release a weekly inventory report later today that analysts guess will also show lower demand within the United States.

Global oil supply had been disrupted significantly in March when popular protests sparked an ongoing revolution in Libya, causing the prices to escalate. But now, although the situation in Libya remains somewhat unstable, oil production has been revived in some parts of the country, also contributing to lower global crude oil prices.

[See a collection of political cartoons on turmoil in the Middle East.]

Around the United States, gas is cheapest in Missouri, where the average retail price for regular gasoline is only $3.12 per gallon, and in South Carolina, where the price averages $3.17 per gallon, according to GasBuddy.com. By contrast, Hawaii continues to have the highest average gas price at approximately $4.31 per gallon.

Though the recent national average prices have been a relief from May's nearly $4 per gallon price tag, they still remain higher than a year ago, when the price of gasoline averaged around $2.69 nationally, according to AAA. 

  • Read more about how global economic problems could mean lower gas prices.
  • See a collection of political cartoons on turmoil in the Middle East.
  • See a roundup of political cartoons on gas prices.