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National average gas price falls, but clouds loom as OPEC announces special meeting

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After some bumps at pumps across the country to start July, the national average gasoline price is again trending lower as crude oil prices step back from their recent rally, falling 1.6 cents over the last week to $2.243 per gallon according to price-tracker GasBuddy.

Across the country, gasoline prices saw a wide range of movements with Michigan, Indiana and Ohio leading states lower, falling 8.7 cents, 7.1 cents and 6.8 cents, respectively. Leading gainers were Missouri, Georgia and Hawaii, up 3.4 cents, 3.1 cents and 2.5 cents, respectively.

The variety of price movements in the last week can be blamed on a tumultuous start to July for crude oil prices, which closed out June seeing a major rally, cooling off after, before rising 5% last week. Government data on supply and demand has thrown markets into disarray with some data bringing out market bulls before the bears return. Demand for gasoline is hitting its peak of the year, according to EIA data, showing gasoline demand over 9.8 million barrels per day in the last few weeks.

Such major moves in oil have caused some states (mainly in the Great Lakes) to see declines after those areas saw gas prices climb after July 4. Great Lakes states tend to see quicker reactions to any change to oil prices versus other areas. This week will likely feature Great Lakes states gasoline prices rising to follow last week’s jump in crude oil prices, while areas outside the Great Lakes will see a 50/50 chance of increases or decreases.

The nation’s cheapest average gasoline prices today can be found in South Carolina, where prices average $1.95 per gallon, with Alabama ($1.97), Oklahoma ($1.98) and Mississippi ($1.99) the only four states with average prices under the $2 level. The nation’s priciest average gallon can be found in Hawaii ($2.99) with California ($2.90) and Washington ($2.81) following suit. It has now been 31 months since the U.S. national average last was above $3 per gallon, while average prices today stand nearly $2 per gallon below their $4.12 peak in July, 2008.

In the weeks ahead, there may be more increases as OPEC last week called a special meeting to take place July 24th. It is unknown what the meeting will be about, but rumors are swirling of a possible change to oil production. Should the cartel alter its quotas, gasoline prices in the U.S. could be affected quickly after. Additionally, oil inventories now stand nearly 40 million barrels below their March level, a sign that high demand or a combination of oil production cuts is starting to lead to a balanced marketplace.

Head of Petroleum Analysis (USA)

Patrick has developed into the leading source for reliable and accurate information on gas price hikes. Patrick has been interviewed as a gasoline price expert hundreds of times since 2004. Based in Chicago, Patrick brings to GasBuddy all his assets to help consumers by giving reliable and accurate price forecasts, including the San Jose Mercury News dubbing Patrick "one of the nation's most accurate forecasters" in 2012.

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