GE:With oil reserves pumped into market, gas prices drop
Gas prices around Florida fell an average of a nickel a gallon over the last week and will probably fall further this week according to AAA and Trilby Lundberg.
While economic factors are getting some of the credit for the price declines, analysts said the decision to pump more oil into the market is a major factor, too.
The International Energy Agency announced last week that 60 million barrels of oil would be brought into the market, with half coming from the U.S. Strategic Petroleum Reserve. The other half will comes from other nations. The international decision was made after OPEC members could not come to any agreements earlier this month on increasing production quotas.
Trilby Lundberg, publisher of the Lundberg Survey, told CNN that prices are likely to fall another five to 20 cents a gallon during the upcoming weeks. Lundberg cited lowered demand for gasoline due to underemployment or unemployment.
AAA officials also pointed to slow economic growth domestically and internationally as reasons why demand for oil remains relatively low.
The international agency’s “Decision to release oil reserves into the market is part of an effort to help stimulate the economy by making gas prices less of a burden on consumers and hopefully create more disposable income," said Jessica Brady, spokeswoman for AAA Auto Club South. "Although oil prices were falling before the IEA announcement, the reserves will help keep downward pressure on oil prices and cause retail gas prices to drop even further during the coming weeks.”
Gas was selling for an average of $3.54 a gallon statewide by Monday morning.
