US oil fell 2.3% to $88.54 a barrel, the weakest settlement since Feb. 2. Brent oil, the world benchmark, fell by about 3%.
Robert Yawger, vice president of energy futures at Mizuho Securities, noted that the weekly Energy Information Administration report showed a decline in refinery utilization, rising gasoline inventories and a shrinking amount of gasoline delivered.
“I can’t stress enough that those three things shouldn’t happen in the summer,” Yawger said. “It implies that there is a bad demand situation.”
The EIA report indicates that Americans are using less gas than they did last summer (when prices were lower), but even into the summer of 2020, when Covid-19 still curbed travel.
The four-week moving average of gasoline delivered for the week ending July 29 was 8.6 million barrels per day, down about 9% from the same period of 2021 and slightly lower than the same period of 2020. EIA.
Some people stopped driving when gasoline rose above $5 a gallon in mid-June.
Since then, the national average for regular gas has fallen 51 days in a row, to $4.14 a gallon on Thursday, according to AAA. That’s down from 14 cents in the past week and 67 cents in the past month.
Oil prices have fallen 28% since their recent closing high of $123.70 on March 8 in the wake of the Russian invasion of Ukraine.