Declining Gas Prices Could Be Coming To An End

The have been on the decline for last six weeks

FRANKFORT, Ky. (Story Courtesy of Kentucky Today- Tom Latek) – Gas prices in Kentucky, as well as the rest of the nation, have now been in a decline for six straight weeks, but there are a few factors that could put an end to the trend in the not-too-distant future.

According to GasBuddy.com, a crowd-sourcing gas and diesel fuel price app and website, the average price for a gallon of regular gas in Kentucky on Tuesday reached $3.99. That’s a 16-cent drop from last week and 63 cents lower than a month ago, bringing the levels down to nearly what they were at the end of April, when the gas price surge began. But it’s nowhere near the prices of a year ago, which were $1.11 per gallon lower.

It’s a similar story across the U.S., although prices are still considerably higher than in Kentucky, which has the 11th lowest prices in the country. The nationwide average was $4.31 on Tuesday, down 16 cents from a week ago and a decrease of 57 cents from this time last month.      

Patrick De Haan, head of petroleum analysis at GasBuddy says, “I have no reason yet to expect the decline won’t reach seven straight weeks, as gas stations still have plenty of room to decline as oil prices remain under $100 per barrel.”

However, he says there are some signs to watch out for in the coming days.

“Should the tropics become more active, the decline could eventually reverse,” he pointed out. 

That’s because should hurricanes, especially powerful ones, develop in the Gulf of Mexico, that will not only shut down the drilling platforms, but systems that make landfall along the Gulf Coast may damage the refineries, and that could take weeks to repair.”  

De Haan says the economic news could have an effect, and not just if the Fed raises the interest rates.  “This week we’ll see GDP data for the second quarter, and if it’s better than expected, we may see oil rally, slowing the descent.

“For now, 11 states are seeing average prices under $4 per gallon, a number that will rise this week, with over 40,000 stations under that level. That will keep $266 million per day in motorists’ wallets versus mid-June.”