AAA: About 4 Cents per Gallon Drop in Gasoline Prices

West Virginia motorists will be paying 3.7 cents less per gallon this week at the pump.

The West Virginia average price for a gallon of self-serve, regular unleaded gasoline is $2.721.

The national average price is $2.724 per gallon, down 3.1 cents from last week.

According to AAA’s Fuel Gauge, crude prices ended the day slightly down after being unable to sustain earlier gains. After reaching almost $74, prices on the NYMEX closed at $71.95, down 11 cents from the opening.

The price of crude oil continues to closely follow the direction of the stock market indices, which received a boost today on news that the U.S. nonmanufacturing sector continues to grow, although at a very slow rate.
Helping move oil higher was a slide by the dollar of nearly 1% against most of the world’s major currencies, including a 0.8% decline against the euro.

Oil prices tend to increase when the value of the dollar slides because oil is priced in dollars, making it cheaper for other countries to purchase.

The strength of the dollar is determined by a multitude of factors. A few important consensus factors that contribute to a weak dollar are all present in the current economy - budget deficits, weak overall national economic performance and large injections of dollars into the economy.

As long as these factors are in place, the dollar will likely remain weak and oil prices will continue to be affected in some measure.

Giving a historical perspective, the Independence Day holiday is one of the signature price points of the summer driving season.

This year, the national average retail price for a gallon of self-serve regular on July 4th was $2.74, 12 cents more than last year’s holiday price of $2.62.

At the same time, fuel prices this year remained significantly lower than those witnessed during Independence Day holidays in recent years.

On July 04, 2008, the national average climbed to $4.10 per gallon on its way to an all-time record high of $4.11 per gallon notched on July 17, 2008.

This year’s average price on July 4 was about 20 cents per gallon less than the prices in 2007 ($2.95) and 2006 ($2.93).

This week’s average prices: West Virginia Average =  $2.721
Average price during the week of June 29, 2010 =  $2.758
Average price during the week of July 07, 2009 =  $2.612