The release of oil from the Strategic Petroleum Reserve drives down oil prices and lowers gasoline prices, according to AAA.
The national average for a gallon of gasoline is now $4.19, down 6 cents from last week, AAA reported. The national average is 35 cents more than a month ago and $1.31 more than a year ago.
Gasoline prices set a new high on March 11, averaging $4.33 nationally and $4.44 in Pennsylvania, according to AAA.
The White House announced on March 31 that President Biden had ordered the release of 1 million barrels of oil per day from the reserve for the next six months.
Managed by the US Department of Energy, the reserve is a collection of underground salt caverns along the Gulf Coast where millions of gallons of crude oil are stored.
Biden’s announcement came as OPEC and its allies announced a plan to gradually ramp up production, according to AAA.
According to AAA, gasoline demand is down for a third consecutive week, defying seasonal trends and possibly due to rising prices and changes in driver habits.
“The upward push in oil prices caused by Russia’s war in Ukraine is coming under stronger downward pressure from the planned release of SPR oil and heightened fears of covid in China,” the spokesperson said. of the AAA, Andrew Gross. “And lower global oil prices are reflected in lower pump prices for American consumers”
The announcement of the oil release, combined with a drop in demand in China caused by an increase in covid cases and movement restrictions there, caused oil prices to fall, leading to a drop in oil prices. gas in the United States last week, said Patrick De Haan, head of oil analysis at price-tracking service GasBuddy.
“As long as oil prices stay below $100 a barrel and there is no escalation in Russia’s war on Ukraine, we could be on the verge of seeing gas prices come down. again this week as the United States and other countries attempt to increase oil supply to drive down prices.” he said.
According to GasBuddy’s survey of prices at 731 stations, average gasoline prices in the Pittsburgh area fell 2.5 cents per gallon last week to $4.27 on Monday. That’s 22.4 cents per gallon more than a month ago and $1.27 more than a year ago.
Prices in the Pittsburgh area ranged from $3.95 to $4.59 per gallon, a difference of 64 cents. Statewide, prices ranged from $3.69 to $5.07, a difference of $1.38 per gallon.
Gasoline prices will likely continue to fall if demand continues to fall as gasoline inventories continue to pile up, AAA said.