The price of oil dropped Thursday after President Joe Biden reportedly asked big oil buyers such as India and Japan - as well as China for the first time - to consider releasing strategic stockpiles of crude.
Oil prices sank about 4 percent to a six-week low following reports about Biden's request and China's decision to release some crude reserves, before recovering some ground later in the day.
World oil prices fluctuate rapidly in response to speculation about future supply and demand, and the prospect of strategic reserves adding to supply were enough to send prices retreating.
'The market is going to continue to be nervous, because it is on guard for a release,' said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Chevron gas prices over the $5 mark are displayed in Visalia, California on November 16. The price of oil dropped Thursday after reports of a coordinated stockpile release
The price of WTI crude is seen from 2019 to the present. Oil prices have dipped off their recent highs following reports that Biden is asking China to release strategic reserves
Oil prices have been drifting down from their recent peaks in late October, though this has not yet translated to major changes at the pump.
Last week, the national average price of gas fell one penny from the prior week, to $3.41, in the first weekly decrease in months according to the AAA Gas Price Index.
Gas remains most expensive in California, at $4.68 per gallon, followed by Hawaii ($4.34), Nevada ($3.97), Washington state ($3.87).
'A slight dip in gas demand, possibly due to seasonal driving habit changes, is contributing to some price relief at the pump,' said Andrew Gross, AAA spokesperson.
'Unfortunately, the ongoing tight supply of crude oil will likely keep gas prices fluctuating, instead of dropping, for some time,' he added.
According to new data from the Energy Information Administration (EIA), gasoline demand dropped from 9.5 million barrels/day to 9.26 million barrels/day.
This drop coupled with an increase in the domestic crude oil supply caused downward pressure on prices at the pump.
Last week, the national average price of gas fell one penny from the prior week, to $3.41, in the first weekly decrease in months
However, AAA predicts pump prices will likely remain elevated for consumers as long as oil prices are above $80 per barrel.
Brent crude, which tracks the global price of oil, hit a session low of $79.28 on Thursday morning, but was up up 53 cents, or 0.7 percent, at $80.81 a barrel at 11.55am.
