Summer driving just got cheaper
How's your summer going? If you've been taking any road trips, you've probably enjoyed lower prices at the gas pump.
In fact, AAA has reported that as of Monday, the national average price for regular unleaded gasoline had dropped for 12 straight days, the longest consecutive decline since January.
AAA also said a lot of "regional price volatility" has gas prices spiking in some states, especially those west of the Rockies, but most U.S. drivers are paying the lowest July gasoline prices in six years. And they're saving, on average, 82 cent per gallon compared to this time last year.
You can blame, or thank, a very bearish global oil market for the latest drop in gas prices. While oil prices rose Wednesday, after the U.S. Energy Information Administration reported an unexpected 4.2 million barrel decline in the nation's commercial crude oil inventories last week, Reuters reported that crude oil prices have dropped about 8 percent so far this year, and that "the pace of the build-up in inventory is showing few signs of reversing."
Oil prices have been on a relatively steady downward trajectory since June of last year, due in part to the North American shale oil boom and decisions by OPEC to maintain its production levels.
A survey by Reuters on Tuesday also noted that OPEC member nations produced about 3 million barrels per day (bpd) of oil more than overall daily demand in this year's second quarter.
Despite recent inventory drops, "we still have a lot of crude," Jeff Mower, director of Americas Oil News for Platts, the energy and metals information firm, told CBS MoneyWatch. And he said stronger domestic demand for gasoline has helped to keep crude oil prices stable, if only for the moment.
Mower noted that U.S. oil refineries came out of their spring maintenance slowdowns with extended production runs, thanks to that strong consumer demand.
But he added that doesn't mean U.S. oil producers have fully bounced back from their recent rounds of job cuts and taking oil rigs out of service. A wide spectrum of economic issues can still play havoc at any given time on the global oil market, and he pointed to how the recent Chinese stock market crisis has pushed crude prices lower.
"I would say (the oil price drop) is a continuation of this global crude surplus that started last June," Mower continued. "Even though production growth has seemed to slow down, the market is not convinced fully that it's slowed down enough to warrant a big increase in crude prices."