Gas prices in Massachusetts continue to fall as summer ends, demand wanes and domestic production increases.
However, markets are closely monitoring tropical storm activity in the Atlantic and rising tensions in the Middle East, analysts say.
The average price of gasoline in Massachusetts is down 4 cents from last week, averaging $3.42 per gallon, AAA Northeast said Monday. That’s the biggest weekly drop since early June and gasoline is cheaper than it has been since mid-April.
In the previous two weeks, costs fell by two cents each, and last month by nine cents, after two weeks of price increases of several cents in early July.
The price of gasoline in the Bay State is 34 cents lower than a year ago ($3.76).
The average price in Massachusetts is also 2 cents below the national average, which is down 3 cents from last week and averages $3.44 per gallon.
In Rhode Island, gasoline costs an average of $3.35 per gallon, five cents less, AAA Northeast said.
“It appears that gas prices are falling seasonally as the summer season comes to a close,” said Mark Schieldrop, senior spokesman for AAA Northeast. “But tensions in the Middle East and renewed tropical storms could turn the tide.”
Last week, gasoline demand was 8.9 million barrels a day, down nearly 300,000 barrels from the previous week, according to the Energy Information Administration’s latest report. Meanwhile, inventories, which had been shrinking for two weeks, rebounded as refiners added 1.3 million barrels to national supplies, the AAA said.
The supply and demand picture mitigates the impact of crude oil prices, which rose sharply last week in anticipation of escalating conflict in the Middle East. Crude oil prices were also supported by the emergence of a new tropical disturbance that now looks likely to develop into Hurricane Ernesto and could threaten the United States later this week, AAA said.
