Oil prices took a dive this week, increasing the selloff acting that has already started to offer some relief for drivers trying to make the most of the rest of the summer, but feeling the pinch at the pump.
Indeed, US oil slipped more than 5 percent the first week of September, down to $82.41 a barrel. This is the lowest intraday price since the last week of January. More importantly, perhaps, this is US crude oil has now fallen by at least a third since peaking at $130 a barrel, briefly, in March.
Similarly, the world benchmark Brent crude also fell below $90 a barrel for the first time since the second week of February. Brent had recently registered a slide of 4.6 percent, to a price of $88.55 per barrel. US benchmark West Texas Intermediate settled down 5.69 percent—or $4.94 less—to $81.94 per barrel.
The sell-off comes only a few days following an announcement from OPEC (and its allies) that they would cut production to help improve pricing for consumers. That said, analysts expect for US crude stockpiles to fall for the fourth week in a row, an estimated decline of 733,000 barrels.
Analysts advise that a variety of factors led to losses this week. These factors include, first of all, concerns about global economic health in the face of the skyrocketing value of the US dollar. When the US dollar is strong, of course, it tends to weaken overseas oil demand. Sure enough, the high oil prices have started to put some pressure on the economy in Europe.
All of this in mind, though, it appears that the recent drop in oil prices should be the start of a trend that, hopefully, will continue through the rest of the year. For example, that national average peaked at $5.02 per gallon on June 14, but has been in decline over the 85 days since then. This has led to a far more attractive national average price per gallon of $3.76, which is actually 31 cents down from a month ago. As a matter of fact, at least 15 states are averaging a price per gallon of $3.50 (or less).
