COLUMBUS – For the first time in seven months, prices at the gas pump are lower than they were one year ago, thanks to an abundant supply of gasoline and falling crude oil prices.
The average price in Columbus Monday morning was $2.25, 51 cents lower than on June 12, 2016, according to a daily survey from the auto club AAA, the Oil Price Information Service and WEX, Inc.
Ohio is one of 24 states to see this trend, and has experienced one of the steepest declines in the country, according to AAA analysts. The statewide average price of $2.23 was 12 cents cheaper than the week before and 46 cents lower than the year-ago price.
Crude oil is the major factor driving down gas prices. Analysts say the lower price shows that the market is skeptical that OPEC will be able to rebalance global supply through its production cuts, which are scheduled to last through March 2018.
Industry analyst Trilby Lundberg of the Lundberg Survey said Sunday that gas prices in the coming weeks may decline unless crude oil prices rebound quickly.
Market watchers are looking at long-awaited gasoline demand in the US to see if it will grow enough to eat away at ballooning inventories but, while demand is high, refinery output has more than kept pace, which has led to growing stockpiles.
With the summer driving season in full swing and, historically, experts say the first three weeks of June indicate whether consumers will sustain gasoline demand throughout the summer. This year, cheaper crude oil barrels are making gasoline production profitable for refineries, and leading to record production levels.
Barring refinery glitches and shutdowns analysts, including Lundberg, believe prices at the pump could drop further this summer.