ECONOMY

Austin drivers get some relief at the gas pump, at least for now

Lori Hawkins
Austin American-Statesman
Carly Ammel fills up her car at Chevron gas station on Congress Avenue in Austin. Average gasoline prices in Austin have fallen 14 cents per gallon in the past week and currently average $3.24 per gallon of regular unleaded, according to GasBuddy.com.

Austin drivers are getting some much-needed relief on gasoline prices — at least for now.

Average prices in Austin have fallen 14 cents per gallon in the last week, and currently average $3.24 per gallon of regular unleaded gasoline, according to industry website GasBuddy.com, which tracks fuel prices across the country.

Prices in Austin are 34 cents per gallon lower than they were a month ago, but are still 51 cents per gallon higher than a year ago, according to GasBuddy's survey of 830 stations in Austin. The national average price of gasoline has fallen 8 cents per gallon in the past week, currently averaging $3.75 per gallon.

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According to GasBuddy, the cheapest station in Austin was priced at $2.81 per gallon while the most expensive was $4.69 per gallon. In May, the average price of gasoline jumped above $4 a gallon in the Austin area for the first time as fuel costs reached record highs in Texas and nationwide.

The current national average is down 30 cents per gallon from a month ago, while it is 58 cents per gallon more than a year ago, according to GasBuddy data compiled from 11 million weekly pricing reports over 150,000 gas stations across the country.

Diesel prices declined 2 cents in the past week and currently stands at $5.02 per gallon.

"The national average (for regular unleaded) has declined for 12 straight weeks, the longest tally since 2018, and it could soon eclipse that mark if we see two more weeks of decline," said Patrick De Haan, head of petroleum analysis at GasBuddy.

But that trend of lower prices could change, considering the decision this week by oil and gas consortium OPEC to cut oil production, De Haan said.

"For now, price movements will be contingent on where you are, with California seeing some minor increases, while the Great Lakes could see an upward move as BP's refinery outage has had an impact on supplies," he said. "In the Gulf and Rockies, prices may continue to fall, so a very mixed bag for motorists in the week ahead."

In addition, De Haan said, "There are several (tropical weather) disturbances in the Atlantic to keep an eye on, but we do switch back to cheaper winter gasoline in just over a week, which should provide some additional relief."

Lower oil prices, modest domestic gasoline demand and a quiet hurricane season are combining to drive pump prices lower, according to auto club AAA.

“According to weather analysts, it’s the first time in 25 years that a named Atlantic storm did not develop in August. That’s the good news,” said Andrew Gross, AAA spokesperson. “But we still have another month of peak hurricane season, and these storms can affect gas prices by disrupting oil production and refining.” 

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Oil prices dipped on recent lackluster Chinese manufacturing output due to lower demand for goods and new COVID19 outbreaks in critical industrial cities, AAA said. This is fueling fears that oil demand could drop in China, the world’s largest importer of crude oil. 

Other factors at play: OPEC and allied oil-producing countries, including Russia, made a small trim in their supplies to the global economy on Monday, underlining their unhappiness as recession fears have driven down crude prices — along with the cost of gasoline.

The decision for October rolls back a mostly symbolic increase of 100,000 barrels per day in September. It follows a statement last month from Saudi Arabia’s energy minister that the OPEC coalition could reduce output at any time.

Oil producers such as Saudi Arabia have resisted calls from U.S. President Joe Biden to pump more oil to lower gasoline prices and the burden on consumers. OPEC has stuck with only cautious increases to make up for deep cuts made during the COVID-19 pandemic, which were finally restored in August.

Since then, growing worries about slumping future demand have helped send oil prices down from June peaks of over $120 per barrel, cutting into the windfall for OPEC countries' coffers but providing a break for drivers in the U.S. as pump prices have eased.

The supply cut for October is only a small fraction of the 43.8 million barrels per day under OPEC production goals, but oil prices jumped after the announcement.

U.S. crude rose 3%, to $89.79 per barrel, while international benchmark Brent was up 4%, to $96.50, after the decision.

The amount of oil per day “may seem negligible, but the message from today's cut is clear: OPEC+ thinks they've fallen enough,” Columbia University energy policy expert Jason Bordoff tweeted.

Oil prices have gyrated in past months -- recession fears have pushed them down, while worries of a loss of Russian oil because of sanctions over its invasion of Ukraine pushed them up.

Recently, recession fears have taken the upper hand. Economists in Europe are penciling in a recession at the end of this year due to skyrocketing inflation fed by energy costs, while China's severe restrictions aimed at halting the spread of the coronavirus have sapped growth in that major world economy.

Additional material from the Associated Press.