The numbers have been falling pretty steadily (if slowly) for more than a month. The simple explanation - and there's nothing very simple about why gas prices go up or down - is that U.S. demand has been weak and oil supply appears plentiful. Assuming that refinery operations remain online, state and local prices should be stable to lower in the weeks leading up to the Memorial Day weekend. An average gallon of regular in the L.A. area is $3.988, according to the Auto Club, down about a penny this week and almost 20 cents from a month ago. It's the first time in two months that the average price has been under $4. Oil analyst Geoffrey Styles offers his take:
Longer-term, oil and gasoline prices remain as unpredictable as ever. However, the trends combining to produce today's weaker prices could well have staying power. It's still relatively early days in the US shale, or "tight oil" upsurge, with more growth expected, and new-car fuel economy continues to improve. Those factors support the trend of falling US oil imports, which will take pressure off global markets, no matter what happens to demand in Asia. At least until we see a different configuration of factors the argument for suspending our assumption of steadily rising future oil and motor fuel prices looks pretty robust. That suggests that the case for EVs and alternative fuels must be made on the basis of other factors and, if anything, be prepared to weather another period of lower fuel prices should oil continue to weaken.