Motorists will find more relief at the pump this summer as gasoline prices are expected to be lower than previously forecast, thanks to lower crude oil costs, the U.S. government said Thursday.
In its monthly forecast, the Energy Department said the price at the pump should average $1.46 a gallon this summer, down 10 cents from the prior estimate.
But the pump price still will be 7 cents higher than last summer. The U.S. summer driving season runs from April to September.
The national price for regular, self-serve gasoline has declined for seven weeks in a row from its March 17 peak of $1.73 a gallon and now averages $1.51.
The most expensive gasoline is in California, where it is about 45 cents a gallon higher than elsewhere because of supply constraints in the state, including refineries shut down longer than planned for maintenance, higher taxes and the unique clean-air blend.
The revised pump price was caused by an increase in petroleum inventories and the decline in crude oil costs, which have fallen to about $26 a barrel from almost $40 in late February.
The price of crude accounts for about 40% of the cost of gasoline.
“The sharp fall in crude oil prices since midwinter and the general belief that world oil supplies are increasing sufficiently to relieve the tight oil inventory situation over the next two quarters have taken substantial pressure off U.S. gasoline and other product markets,” the Energy Department said.
But the government warned that the U.S. gasoline market could tighten again if world oil markets don’t continue to ease, or if domestic refining and pipeline distribution facilities are disrupted.