Lower oil prices reflected in falling gas prices, analysts say

The release of oil from the Strategic Petroleum Reserve is causing oil prices to pull back and bringing down gasoline prices, according to AAA.

The national average for a gallon of gas is now $4.19, down 6 cents from last week, AAA reported. That’s still 35 cents higher than a month ago and $1.33 higher than a year ago.

Gas prices set a new record high March 11, averaging $4.33 nationally and $4.44 in Pennsylvania, according to AAA.

The White House announced March 31 that President Biden ordered the release of 1 million barrels of oil per day from the reserve for the next six months.

Managed by the U.S. Department of Energy, the reserve is a collection of underground salt caverns along the Gulf Coast where millions of gallons of crude oil is stored.

Biden’s declaration came as OPEC and its allies announced a plan to gradually increase production, AAA reported.

According to AAA, demand for gasoline is down for a third straight week, defying seasonal trends and possibly because of higher prices and drivers changing their habits.

“The upward push on oil prices caused by Russia’s war in Ukraine is meeting stronger downward pressure from the planned (government) oil release and increased covid fears in China,” AAA spokesperson Andrew Gross said. “And lower global oil prices are reflected in falling pump prices for consumers in the U.S.”

“So long as oil prices remain under $100 per barrel and there’s no escalations in Russia’s war on Ukraine, we may be poised to see gas prices decline again this week as the U.S. and other countries try to raise oil supply to tip prices lower,” said Patrick De Haan, head of petroleum analysis at price tracking service GasBuddy.

According to GasBuddy’s survey of prices at 731 stations, average gasoline prices in the Pittsburgh area fell 2.5 cents per gallon in the past week to $4.27 on Monday. That’s 22.4 cents per gallon more than a month ago and $1.27 more than a year ago.

Prices in the Pittsburgh area ranged from $3.95 to $4.59 per gallon — a difference of 64 cents. Statewide, prices ranged from $3.69 to $5.07, a difference of $1.38 per gallon.