August 1

8/1 - The AAA average for regular gasoline was $4.22 per gallon on 7/30, down from a high of $5.01 in mid-June, but still up 33% from $3.17 a year ago. WTI crude oil futures, at $98.62 per barrel, were still north of $120 just a month ago. Forecasts for weaker global oil demand, plus rising U.S. inventory levels, precipitated the price declines. The EIA reported U.S. refining capacity dropped to 17.9M barrels per day (bpd) in 2021, down from a high of 19.0M bpd in 2019. Roughly 16% of that liquid fuel deficit was filled by Mexico in the first half of 2022, but mostly it’s an increase in fuel milage combined with lackluster consumer demand that’s allowed prices to ease a bit. Looking forward, WTI futures contracts for the first half of 2023 are averaging lower at $89.88. The EIA forecasts U.S. gas prices will average $3.57 in 2023, down from a projected $4.05 average for 2022.