Gas prices still low despite record demand AAA

Gas prices still low despite record demand AAA

Relatively cheap gas prices are boosting driving demand nationwide, as well as demand for SUVs and other light trucks. 2016 remains positioned to be a record year for both gasoline consumption and annual miles traveled, according to the American Automobile Association. Late Aprilês gas price of $2.14 per gallon is 39 cents lower than a year earlier.

The question is whether refiners can keep pace with the expected increase in demand as we enter the summer driving season. Demand is likely to surpass last year, which means another higher-than-normal year of refinery runs. That in turn can put additional strain on refinery equipment and overall operations. Even so, drivers are expected to pay some of the lowest prices for the summer in more than a decade.

The main reason for the lower gas prices is lower crude oil prices and minimal disruptions in supply. Although domestic production is declining, the global oil market is expected to remain well supplied, keeping the price at the pump relatively low.