Story By Myra P. Saefong |MarketWatch| Gasoline prices at the pump marked what GasBuddy referred to on Monday as an “ultra-rare” double-digit weekly drop per gallon during the summer driving season — but that likely has nothing to do with the Biden administration’s recent decision to release all of the fuel from the nation’s gasoline reserve.
According to GasBuddy, retail prices fell for a second week in a row last week, with the U.S. average for regular unleaded gasoline down about 10 cents from a week earlier, at $3.40 per gallon Monday. That’s based on data compiled from more than 12 million individual price reports covering more than 150,000 gas stations around the nation.
“We’ve seen one of the larger weekly drops in the national average price of gasoline in some time, and what incredible timing that it comes at the beginning of the summer driving season,” said Patrick De Haan, head of petroleum analysis at GasBuddy, in a press release. “Not only have gasoline prices plummeted in nearly every state in the last week, but nearly every state has also seen prices drop compared to a month ago.”
Gas prices have fallen 23.8 cents a gallon from a month ago, GasBuddy data show.
According to GasBuddy, U.S. retail gas prices have fallen for 2 weeks straight. GASBUDDY
De Haan told MarketWatch that gas prices have been at their lowest June level since 2021, and the weekly drop has been the largest since July of last year.
“This is likely happening because not only have oil prices dropped, but refinery maintenance is behind us, and refineries have continued to crank up output, boosting supplies,” he said.
The declines in gas prices follow the U.S. Department of Energy announcement last month to release 1 million barrels of gasoline from the nation’s Northeast Gasoline Supply Reserve (NGSR) to help lower fuel prices during the summer driving season.
Read: Goldman Sachs Sees Oil Prices Rising to $86 This Summer
The reserve, established in the wake of superstorm Sandy in 2012, only holds 1 million barrels, or 42 million gallons of gasoline, so the release would empty out the reserve. U.S. Secretary of Energy Jennifer M. Granholm said the gas in the reserve would be released “strategically” between Memorial Day and July Fourth.
However, De Haan said he does not believe Biden’s Congress-mandated decision to close the NGSR is having a material impact.
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“None of the states where the release would have an impact are showing in a list of largest weekly or monthly declines,” he said.
The reserve is located in the Northeast and Port Reading, New Jersey, with 900,000 barrels, holds the largest chunk of gas for the NGSR. The average price for regular unleaded in that state was at $3.41 Monday, down 5.7 cents a gallon from a week ago and 17.1 cents lower than a month ago, GasBuddy data show.
Gas prices are still higher than at the start of the year. On Jan. 1, they averaged $3.062 a gallon.
De Haan said that’s because of additional demand in the summer versus winter and higher costs for the more environmentally friendly summer gasoline blend.
U.S. oil prices have increased since last year’s end, with West Texas Intermediate crude futures up 5.4% year to date as of last week. Futures prices for reformulated gasoline have climbed by 13.3% this year.
