US retail gasoline price down for sixth week

20 August 2008 23:48  [Source: ICIS news]

HOUSTON (ICIS news)--The US average retail gasoline price was down for the sixth consecutive week as a result of weaker crude levels in August, the Energy Information Administration (EIA) said on Wednesday.

West Texas Intermediate (WTI) crude oil spot prices have dropped from a high of $145/bbl in mid-July to under $113/bbl by Monday, the EIA said in its weekly commentary.

Falling crude prices have caused the US average retail price for regular grade gasoline to drop from over $4.11/gal in early July to $3.74/gal as of Monday.

A sharp decline in US oil consumption and an increase in production by Saudi Arabia were factors in the fall in crude prices, the EIA said.

Oil consumption data for May showed a year-on-year decline of nearly 900,000 bbl/day. This followed a year-on-year decline of nearly 800,000 bbl/day in April and over 900,000 bbl/day in the first quarter of 2008.

EIA said the declines shown during the first few months of the year were not entirely surprising because of the significantly warmer weather and much higher prices relative to the same period in 2007.

At the same time, oil demand growth in places like China, India, the Middle East and South America seemed to show little, if any, response to high prices, the EIA said. However, more recent data have begun to show a shift in these trends.

The EIA also said by the time May data was released in late July, it was clear that higher oil prices had taken a toll on the US economy, a fact that became cemented in the minds of many analysts.

With the market anticipating further oil demand declines elsewhere in the world, crude oil prices dropped fairly dramatically in a short period of time, along with prices for gasoline, diesel, and jet fuel said EIA.

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By: Brian Balboa
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