Gas Prices Drop Two Cents A Gallon Overnight

The price of gasoline may be finally catching up to the decline in crude oil prices. The national average price of self-serve regular today is $3.926 a gallon, down about two cents from yesterday, according to the AAA Fuel Gauge Survey.

The price has been falling for more than a week, but usually just a fraction of a cent per day. It's now six cents below it's May 5^th peak.

Eleven states - Alaska, California, Connecticut, District of Columbia, Hawaii, Illinois, Michigan, New York, Rhode Island, Washington and West Virginia – still have average gas prices above $4 a gallon.

Plentiful supplies

Crude oil prices have retreated from prices well above $100 a barrel this month as oil traders became less convinced that the current global economy can support expensive gasoline. Data from the U.S. Energy Information Administration (EIA) shows there isn't anything remotely resembling a supply shortage.

The EIA for the week ending May 13 shows there was little change in either oil or gasoline inventories from the previous week, when stockpiles were in the upper range of expected supplies for this time of year. U.S. oil refineries operated at 83 percent of their capacity.

One legitimate reason oil and gasoline prices could continue to move higher is if economic growth continues, if not in the U.S. then in other countries. Growing economies would need more energy and would have the means to pay the higher prices.

But the Economic Cycle Research Institute says short term, at least, stronger economic growth probably isn't in the cards. In its latest forecast the Institute says it thinks economic output will peak this summer, then begin to slow down.

It might not be enough of a slowdown to trigger a recession, but it just might give consumers a break at the gas pump.