INDIANAPOLIS - Increased Midwest refinery production is being partially credited with Indiana's continued downward swing in gas prices, a trend that is also being seen across most of the United States, according to AAA Hoosier Motor Club.
"Numerous refinery issues had a dramatically negative effect on Midwest gasoline prices this past spring," said Greg Seiter, public affairs manager at AAA Hoosier Motor Club. "But reports indicate that Midwest refinery production has now reached a 2015 high point and as a result, gas prices have moved substantially lower in much of the region."
Indiana's current statewide average for self-serve regular unleaded is $2.40. One week ago, that average was $2.52. At this time last year, Hoosiers were paying $3.38.
The current nationwide average is $2.68, eight cents below what it was just one month ago.
The price of crude oil is also helping the marketplace.
Thanks in part to what is being referred to as an oversupplied market, domestic crude inventories grew by 2.5 million barrels in the most recent weekly report, while the number of U.S. oil rigs grew by 21, the largest gain since April 2014. In short, supply continues to outpace domestic demand and as a result, West Texas Intermediate crude oil, the U.S. benchmark, fell below $50 per barrel this past week for the first time since April.
Industry experts also say worse than expected economic data out of China, which has shown growth in that country to be more volatile than anticipated, could further increase the global glut in oil and gasoline supplies.
The price of oil generally accounts for more than half the cost of retail gasoline at the pump so lower crude oil prices typically lead to lower pump prices, baring other influencing factors like refinery issues, distribution challenges or changes in demand.