TAMPA, Fla. - The U.S. dollar dropped to a 16-month low against the euro last week and pushed crude prices to settle Thursday, during the shortened trading week, at $112.29 a barrel on the New York Mercantile Exchange—$2.63 more than last week.
Since oil is traded in U.S. currency, a weak dollar increases the appeal of crude as a commodity to those who trade with a foreign currency.
U.S.stockpiles of crude unexpectedly increased last week by 2.3 million barrels, when they were projected to decrease by 1.3 million barrels, according to the Energy Department. The supply drop also helped push oil prices higher last week, despite reports showing fuel demand is down. It's possible the decrease could be the result of refinery shut downs along the East Coast for maintenance purposes.
"As long as the dollar remains weak against other currencies like the euro, oil prices will remain elevated," said Jessica Brady, spokesperson, AAA Auto Club South. "It's likely oil prices will yo-yo between $105 and $115 a barrel for the next couple weeks as various economic reports on supply and demand are released. Retail gas prices inched up slightly last week and are expected to do the same again this week, with average increases between 1 and 5 cents, respectively."
The national average price of unleaded regular gasoline is $3.86, 4 cents more than last week. Florida’s average price of $3.82 per gallon remains unchanged. While Georgia’s average price of $3.73 increased 2 cents from last week and Tennessee’s average price of $3.66 increased 1-cent, respectively.
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AAA’s Daily Fuel Gauge Report is updated each day and reflects actual prices from credit card transactions within the past 24 hours at two-thirds (100,000) gasoline stations in the U.S. Its accuracy is unparalleled.