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Gas Prices Expected to Tumble this Fall
AAA: National Average Could Drop by More than a Quarter from Summer High
2018 AAA Gas Watchers Guide Provides Tips to Conserve Fuel and Save Motorists Money
AAA forecasts the national average price for gas will drop by a quarter or more this fall, compared to its peak price this summer.
AAA is predicting that the national average will fall to at least $2.70 in the 3rd quarter of the year, down from its high of $2.97 in May.
“There are two significant factors at play here,” says Amy Parmenter, spokesperson for AAA in Greater Hartford. “After Labor Day and the end of the summer driving season, demand drops off significantly. At the same time, refineries begin to transition to the less expensive winter blend of gasoline, a winning combination for consumers.”
The average price of gas in 2018 has been significantly more expensive than 2017. In fact, the year-to-date-national gas price average ($2.73) is 41-cents more than last year.
What Can Motorists Expect Here in Connecticut?
The fall in gas prices here in Connecticut should mimic the drop off nationwide.
“At its peak, the average price at the pump reached $3.15 at the end of May, so it should fall to at least $2.90 during Q3” Parmenter says.
The average price of gas today in Connecticut is $3.04.
The average price of gas across Connecticut has been 45 cents higher, year over year.
What could prevent cheaper gas prices from coming to a pump near you?
- Crude Market Volatility: Much of 2018 has brought volatility to the domestic and global crude markets, as market watchers try to glean insight into forces that will shape global supply this fall. These forces include:
- Venezuela is a major crude producer for the Western Hemisphere, but its collapsing economy could halt its crude production.
- Organization of Petroleum Exporting Countries (OPEC) announced an increase in production over the summer, but slower-than-expected production growth could contribute to higher crude prices during the second half of the year.
- Geopolitical uncertainty in the Middle East and around the globe could disrupt vital crude flows.
- Iran Sanctions: When President Trump announced that the U.S. would withdraw from the Iran Nuclear Deal in May, the decision sent the crude markets into upheaval. In August, the first round of re-imposed sanctions on the country, which target Iran’s financial sector, went into effect and led to a brief uptick in crude prices. The next round of sanctions, currently scheduled to take effect in November, will target Iran’s energy sector – including its crude exports – and will likely have a more sustained impact on crude prices. If and when those sanctions take effect, crude prices will likely surge over an expected reduction in Iranian crude exports and increased tension in the region that could destabilize global crude flows.
- Updated Hurricane Forecast: The National Oceanic and Atmospheric Administration’s Climate Prediction Center predicts a total of 9–13 named storms (winds of 39 mph or greater of which 4-7 will become hurricanes) including up to two major hurricanes (winds of 111 mph or greater). An average six-month hurricane season produces 12 named storms, of which six becomes hurricanes, including three major hurricanes. The mere threat of a hurricane in the U.S. would cause pump prices to spike, likely regionally, due to constrained supply and delivery challenges.
AAA 2018 Gas Watcher’s Guide
In time for fall, AAA is releasing the 2018 Gas Watcher’s Guide with tips for conserving fuel, saving money and maintaining fuel efficiency. The Guide offers these tips – and many more - for motorists to keep in mind as they fill-up at the pump:
· If your vehicle’s engine does not require premium or mid-grade fuel, don’t buy it. Using anything other than regular grade is simply a waste of money.
· Don’t top off your gas tank. Stop filling after the automatic nozzle shuts off the second time.
· If you have to replace a gas cap, make sure it is the right one for your car. An ill-fitting cap will increase emissions and trigger the “check engine” light.
· Keep track of gas mileage. If you notice a sudden decrease in fuel economy, have your vehicle checked by a technician to ensure it is operating properly.
Motorists can find current gas prices at GasPrices.AAA.com and along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.
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AAA provides automotive, travel and insurance services to 58 million members nationwide and more than one million members in Connecticut. AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years. The not-for-profit, fully tax-paying member organization works on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel and track their roadside assistance service with the AAA Mobile app for iPhone, iPad and Android. For more information, visit www.aaa.com.