LAS VEGAS (KXNT) – As oil prices fall, retail prices for gasoline should continue to fall. But with volatility in the stock market, all bets are off.
The national average price for gasoline dropped for the first time in 2018, but it’s unclear whether this one-week decline is a signal that cheaper gas is on the horizon for the Silver State.
Nevada’s average price for a gallon of unleaded gasoline was $2.78, holding steady after 45 straight days of rising gasoline prices; Nevada started the year with an average price of $2.65 per gallon and peaked at $2.78 this week. The national average price of gasoline dropped 3 cents this week, signaling that prices in Nevada could fall as well in coming days.
“While prices could drop in the near future, it’s unclear whether gasoline prices in Nevada will continue to fall, or if prices will increase as travel demand picks up later this spring,” said Michael Blasky, a spokesman for AAA Nevada.
U.S. gas prices typically decrease in January and February as travel demand falls after the holiday season, but rising oil prices the last few months resulted in abnormally high prices at the pump. Crude oil prices hovered around $50 a barrel for most of 2017, but jumped to $70 a barrel by early January 2018 after Saudi Arabia and other OPEC countries began to cut oil producation.
The Oil Price Information Service said in its 2018 outlook that $70 prices for crude oil are likely unsustainable in 2018, and after last week’s stock market volatility, crude oil prices dropped nearly 8 percent. On Tuesday crude oil was selling for about $62 a barrel.
Another factor in this year’s higher prices has been a strong economy, especially on the West Coast, which means more people driving and consuming energy. Gasoline demand registered at 9.1 million barrels per day, a 169,000 barrel-per-day increase year-over-year.
“Nevada consumers should be prepared for prices to increase this year another potential 10 to 15 cents, but many market factors will drive that. Without a crystal ball, it’s too soon to determine,” said Blasky.
AAA’s Fuel Gauge Report is the most comprehensive retail gasoline survey available, with more than 100,000 self-serve stations surveyed every day, nationwide. Data is provided in cooperation with OPIS Energy Group and Wright Express, LLC.