U.S. gasoline prices at the pump fell to the cheapest in about a year-and-a-half on Monday, driven lower by sagging crude oil prices and excess supply of the fuel, market participants said.
Nationally, gas prices averaged just under $2.42 a gallon on Monday, the lowest since late August 2017, according to data from the American Automobile Association (AAA). Gasoline futures on the New York Mercantile Exchange were the lowest seasonally since 2015.
Prices have changed course from earlier this year, when they hit seasonal four-year highs.
(For a graphic on gasoline prices, see: https://tmsnrt.rs/2QH3OZA)
Plummeting oil futures have helped deflate gas prices. Crude has plunged about 30 percent since October as global supply has surged and demand growth has weakened.
Further, analyst said excess supply of gasoline in the United States has depressed prices. U.S. refiners have been encouraged to run at high rates to take advantage of strong diesel margins.
However, in the process they have over produced gasoline and driven up those inventories.
Gasoline stockpiles totaled almost 226.3 million barrels in the week to Nov. 30, the highest seasonally since 2016, according to U.S. Energy Information Administration data.
"Gasoline inventories could continue to build through the winter," said Patrick DeHaan, head of petroleum analysis at tracking firm GasBuddy.
At the same time, demand has not kept up. Consumers have made fewer trips to the gas station so far this year due to negative sentiment, and demand has been "lackluster," DeHaan added.
AAA expects prices to fall throughout the end of the year, and drop to a national average of $2.40 a gallon, spokeswoman Tamra Johnson said.
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