Gas prices to see ‘precipitous declines’ in weeks ahead, price wars could emerge

The nation's average gas price has fallen for the fourth consecutive week and that includes the Dayton area. JIM NOELKER/STAFF

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The nation's average gas price has fallen for the fourth consecutive week and that includes the Dayton area. JIM NOELKER/STAFF

Prices at the pump continue to plummet this week as oil prices tumble to lows not seen since August amid fears of a pandemic-fueled economic slowdown.

The national average for a gallon of gas dipped three cents on the week to $3.34 by Friday, the lowest national average in a month and a half. The price in Ohio has declined 17 cents per gallon, earning a place on AAA’s Largest Monthly Decrease list.

“As usual, the price of oil is the most significant factor in the price consumers are paying for gas so, as oil comes down, so do pump prices,” said AAA spokeswoman Cindy Antrican. “Unfortunately, this downward trend comes as a result of fears around the new COVID variant.”

The price of oil has fallen into the mid $60s per barrel, down from the mid-80s in October, AAA said. Also helping to ease upward pricing pressure was the decision by OPEC and its oil-producing allies not to cut production.

On Dec. 2, OPEC and its allies, a group referred to as OPEC+, announced it would stick to its plan, for now, to raise production by 400,000 barrel per day in January. The move was likely in response to the Biden Administration’s call to increase supply to tame high fuel prices, according to AAA.

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Total domestic gasoline stocks increased by more than 4 million barrels per day to 215,422 barrels per day last week, according to new data from the Energy Information Administration (EIA). Meanwhile, gasoline demand dipped from 9.3 million barrels a day to 8.8 million barrels a day. The slight decrease in demand contributed to falling prices, while lower crude prices also put downward market pressure on pump prices.

Friday’s national average of $3.34 for a gallon of gas was eight cents less than a month ago. Ohio’s average was $3.11 compared to $3.29 last month. The average price in the Dayton metro area is $3.02 down from $3.26 a month ago. The average price in the Springfield metro area is $2.98 down from $3.22 a month ago.

The downturn in average gas prices is largely due to continued anxiety over the omicron variant and because some countries have begun issuing lockdowns, keeping motorists in some countries from consuming as much fuel, according to Patrick De Haan, head of petroleum analysis for GasBuddy, a tech company that operates apps and websites based on finding real-time fuel prices at gas stations.

“While the Great Lakes region, the fastest to see prices respond to market fluctuations, is seeing hefty monthly declines approaching 30 cents per gallon, much of the rest of the country is lagging behind,” De Haan said via the GasBuddy blog. “But, we will see precipitous declines in the next week or two as stations continue to sell through higher priced inventory before slowly lowering their prices. It’s not impossible given the conditions that price wars, where stations lower their price significantly, could emerge as stations now have considerable room to lower prices.”

De Haan tweeted Dec. 5 a list of the top 15 largest drops in prices for a gallon of gas nationwide, with Dayton ranking seventh and Springfield ranking 15th. At that point, Dayton had dropped 27.6 cents a gallon and Springfield had dropped 23.6 cents a gallon.

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