Retail gasoline prices are poised to cap the biggest July decline in six years as U.S. refineries process the most oil on record, AAA said.
The decline is helping consumers during the peak-demand summer months, when Americans take the most vacations, and comes as data indicate the U.S. economy is improving.
Gross domestic product rose at a 4 percent annualized rate in the second quarter after shrinking 2.1 percent from January through March, Commerce Department figures showed Wednesday.
Nationally, regular gasoline has dropped 15.5 cents, or 4.2 percent, to $3.517 a gallon this month, according to AAA, the nation’s largest motoring club. Prices have averaged $3.60 a gallon, down from $3.67 in June, after rising more than 4 percent in the three previous Julys, AAA data show.
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But in the Seattle-Bellevue-Everett region, AAA reported the average for a gallon of regular is $3.979, down from $4.002 a week ago and $4.062 a month ago.
“It’s very unusual to see gas prices fall at this time of year,” said Michael Green, a spokesman for AAA. “This is nearly the reverse of what we saw in the previous three years when prices increased considerably in July.”
U.S. oil refineries, which operated at more than 93 percent capacity the past three weeks, processed 16.5 million barrels daily in the four weeks ended July 25, Energy Information Administration figures show. It’s the highest in data going back to May 2005.
Gasoline inventories have increased eight of the past nine weeks. They reached 218.2 million in the week ended July 25, a four-month high.
“There are two main factors behind the drop in gasoline prices,” Green said. “Refineries are running smoothly and producing ample gasoline. Also, there are significant conflicts overseas but prices have stabilized because production and exports haven’t noticeably changed.”
Prices dropped to $3.513 a gallon nationwide this week, the lowest level since March, according to AAA. The highest national average this year was $3.696 on April 26, while the lowest was $3.269 on Feb. 6.
The cheapest gasoline Thursday was in South Carolina, where drivers paid an average of $3.25. The highest price in the continental U.S. was in California at $4.10.