Sluggish fuel demand and low travel demand because of the pandemic are keeping U.S. gasoline prices ahead of Labor Day weekend at their lowest level since 2004, the U.S. Energy Information Administration (EIA) said on Friday.
The U.S. average regular gasoline retail price as of the Monday before Labor Day weekend stood at $2.22 per gallon (gal), the lowest level for this time of year since 2004, the EIA has estimated in its weekly gasoline price series.
Since the peak of the coronavirus-related lockdowns in April, U.S. gas prices had increased from a low of $1.77/gal at the end of April to over $2.00/gal by early June. Average gasoline prices have stayed relatively flat through July and August, with prices around 18 percent lower than those at the same time of 2019, the EIA said.
Gasoline demand had recovered to 90 percent of last year’s demand numbers by the end of June. However, consumption has been hovering around those levels in July and August, the EIA said, suggesting that demand is struggling to return to pre-pandemic levels.
U.S. gasoline demand for the week ending August 28 was 8.786 million bpd, down from 9.161 million bpd for the prior week to August 21. Gasoline demand had materially improved from the April lows until June, but after that, it has been stuck at below 9 million bpd between end-June and end-August, with the week to August 21 the only exception of demand above 9 million bpd.
“Low demand will likely help pump prices stabilize in the build up to the holiday weekend, which could see demand increase temporarily if Americans decide to take to the roads,” AAA said on Thursday, noting that the national average for a gallon of regular gasoline has held steady at $2.23 since Monday, August 31.
On Monday, GasBuddy commented that “This will be the lowest Labor Day weekend gas prices since 2004, closing out an incredible summer at the pump with the most stable and lowest overall price from Memorial Day to Labor Day since 2004 as well.”
By Tsvetana Paraskova for Oilprice.com