Last weekend we all welcomed the month of September, Labor Day celebrations and the unfortunate realization that summer has ended. Though technically the summer doesn’t end until the equinox on September 22nd, the Labor Day weekend traditionally marks the end of summer for schools, as well as the close of the summer driving season.
Back in early April, we discussed the upcoming summer and the expectation of higher prices at the pump as well as some of the reasoning behind it. Though prices did rise to a $2.97/gal high this year, it did not reach the $3.00 - $3.10 mark many experts were calling for. As of September 1st the year-to-date national gas price average stands at $2.73/gal, up $0.41/gal from the same period last year.
Today we have a national average of $2.83/gal and according to the American Automobile Association (AAA) we should see that price drop to a likely $2.70/gal this fall. Let us take a look at why the consumer should see lower prices at the pump this fall season:
- Relative Stability: The oil and gas markets have stayed relatively stable throughout the month of August though there are plenty of ongoing conditions that could influence the markets in short notice i.e. Venezuela’s situation & OPEC supply/demand decisions to name two.
- Dip in Demand: With the end of summer and most schools starting back up all over the country, consumer demand tends to decrease as summer road trips and vacations decrease. The colder temperatures and eventual harsher conditions typically lead to less travel in general.
- Winter-Grade switchover: Every September refineries make the switch over from the more expensive to produce summer-blend gasoline to the cheaper to produce winter-blends. This savings is typically passed on to the consumer just as the rise is in the summer driving season.
One other thing to keep in mind is Hurricane Florence and its unknown impact and aftermath. As with any other natural disaster this could greatly affect the price of gasoline depending on what happens and how devastating it is.