While gas prices in Florida are dropping just in time for holiday travel, AAA warned that “the latest developments in the US-China trade agreement may cause the plunge at the pump to stall or even reverse course.”
On Monday, AAA released a report showing gas prices have dropped in recent days across the Sunshine State with an average price of $2.46 a gallon, down six cents from the start of last week but 16 cents more than this time last year. Prices in Florida remain below the national average which stood at $2.56 a gallon on Sunday.
But AAA noted the current trade talks with China could impact prices.
“Crude oil prices jumped after the U.S. and China announced a tentative ‘Phase One’ trade agreement. This deal would reduce some U.S. tariffs in exchange for increased Chinese purchases of American farm goods. Until now, the trade war has had a limiting effect on crude prices, due to expectations that higher prices on each countries goods would result in lower fuel demand,” AAA noted. “On Friday, the price of crude reached $60.07 per barrel. That was the highest daily closing price in three months, but only a dollar more than where prices were on Monday. A one-dollar shift in crude prices typically influence gas prices by about 2.5 cents.”
“It’s too early to know just how much of an impact this preliminary US-China trade agreement will have on local prices at the pump,” said Mark Jenkins, a spokesman for AAA and the Auto Club Group, on Monday. “Without it, gas prices would certainly continue falling. Gasoline supplies have grown considerably in the past five weeks, while demand has entered its seasonal slowdown. It’s certainly possible these fundamentals outweigh the impacts of the trade agreement, and push gas prices even lower through the end of the year; but if crude prices see significant gains this week, pump prices will reverse course.”
The West Palm Beach-Boca Raton market had the most expensive gas in Florida with an average of $2.57 a gallon followed by Sebring at $2.52 a gallon and Gainesville at $2.51 a gallon.
The Tampa-St. Petersburg-Clearwater area saw the least expensive gas in the state with prices averaging $2.38 a gallon followed by Punta Gorda and Pensacola at $2.40 a gallon.