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NEW YORK -- U.S. motorists enjoyed lower gas prices for 30 out of 31 days during the month of July, making it the first time on record that prices fell this consistently in July.
According to the just-released AAA Monthly Gas Price Report for July 2014, the national average price of gas posted the largest July decline in six years, with average prices dropping about 16 cents per gallon during the month. The monthly average price of gas in July was $3.60 per gallon.
“Falling gas prices are nearly the opposite to what we usually see this time of year,” said AAA spokesman Avery Ash. “Refineries are running at full tilt and there is more than enough gasoline in the market, which has helped bring down prices despite multiple overseas conflicts.”
Gas prices have declined primarily due to record-high refinery production and adequate supplies. Domestic refineries have processed the most crude oil on record during the previous four weeks (a four-week average of 16.5 million barrels per day), according to data from the Energy Information Administration. This has led to very high utilization rates, particularly for refineries that have access to North American crude oil supplies. Strong refinery production generally results in higher gasoline supplies and lower fuel prices, AAA explained.
Gas prices began their current slide in the final days of June. As of July 31, the national average price of gas has declined for 33 out of 34 days, for a total of about 17 cents per gallon.
As for the remainder of the peak summer driving season, AAA classifies gas prices as "in a good position." The national average price of gas currently stands at $3.52 per gallon.
“Gas prices may cost less than in recent years this August as long as refinery production remains strong and oil costs do not rise due to unexpected issues,” Ash noted. “The biggest threat to continued falling prices would be a major hurricane striking the U.S. Gulf Coast. Prices also could rise or remain flat if refineries cut back on production or if there are any major refinery outages.”
Gas prices have decreased in August for three of the previous five years. August and July generally are the busiest driving months of the year, according to data collected by the Federal Highway Administration. Last August, U.S. drivers drove an estimated 266.9 billion miles.
The five states with the highest average gas prices currently are: Hawaii ($4.34), Alaska ($4.13), California ($3.98), Oregon ($3.92) and Washington ($3.92).
The five states with the lowest current gas prices are: South Carolina ($3.25), Alabama ($3.26), Tennessee ($3.29), Oklahoma ($3.30) and Missouri ($3.30).
Overall, 2014 gas prices have remained slightly less expensive, on average, than in recent years. The annual average so far this year is $3.53 per gallon, which is the lowest average for the first seven months of the year since 2010. Last year, the national average through July 31 was $3.57 per gallon.