Gas prices fell last week as consumer confidence reached a 30-year low, pushing oil prices down. On Monday, at the end of trading on the NYMEX, crude oil settled at $87.88 per barrel, up $2.50.
While crude oil prices have exhibited dramatic shifts in momentum in recent trading, gasoline prices have continued to steadily decline. The current national retail average price for a gallon of self-serve regular gasoline is $3.59. Today’s average price is seven cents cheaper than one week ago and eight cents cheaper than one month ago, but remains 83 cents higher than one year ago according to the AAA Fuel Gauge Report.
After rising for 25 of 31 days in July, the national average price at the pump has fallen for 14 of 15 days to begin August. As of today, Hawaii ($4.11) is the only state that remains above the $4 per gallon threshold.
Following last Monday’s dramatic decline of both the major stock market indices and crude oil prices, markets opened on Tuesday with some cautious support as traders regrouped following the largest one-day decline (513 points) in the Dow since December 1, 2008, and the fifth-largest in history. This support focused on Tuesday’s Federal Reserve (Fed) meeting, which was expected to center on the possibility of further economic stimulus in the form of quantitative easing.
Directly following the 2:15 p.m. announcement that the Fed would keep interest rates low through 2013 but not take steps toward a new round of quantitative easing, crude oil and equity markets plunged lower, with crude prices settling $2.01 per barrel lower at $79.30 per barrel at the 2:30 p.m. settlement on the NYMEX. This marked the first time that crude oil had closed below $80 per barrel since October 19, 2010.
A Thomson ReutersbizWatch /University of Michigan report revealed that consumer confidence fell to 54.9 in August from 63.7 in July. The confidence drop, a 30-year low, signals a decrease in fuel demand and contributed to the lower crude oil prices.
“Economic growth is not only slow in the U.S., but in Europe, as well, and is expected to keep oil prices below $90 a barrel throughout the remainder of the month.
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