At $2.48, the national gas price average is at the cheapest price since early November. More so, pump prices nationally have been steadily dropping during the last two weeks. Today’s gas price is three cents less than a week ago, four cents cheaper than one month ago and 30 cents more than a year ago.
“Cheaper winter gas prices are being seen for the bulk of the country as gasoline demand hits the lowest mark since February,” said Jeanette Casselano, AAA spokesperson. “On the week, 90 percent of states saw their gas price average drop – some even by double digits.”
Declining gas prices mirror the Energy Information Administration’s (EIA) latest consumer gasoline demand report, showing a drop of 871,000 b/d on the week for a total demand number of 8.7 million b/d (week ending Nov. 24). EIA’s next report, due out on Wednesday, will indicate if the drop is a trend.
Drivers in the West Coast region are paying some of the highest prices at the pump, even as prices continue to drop across the nation. Current prices in six of the region’s states are the most expensive in the country, including: Hawaii ($3.28), Alaska ($3.23), California ($3.16), Washington ($2.98), Oregon ($2.83) and Nevada ($2.71).
According to EIA’s latest report for the region, gasoline inventories sit at 28.8 million bbl, which is considered a comfortable supply level for the region. West Coast gasoline production fell slightly to 1.57 million b/d, but with gas stocks sitting high, drivers in the region are likely to see prices continue to drop this week.
Great Lakes and Central
For a second week, the Great Lakes and Central states are seeing the largest drops at the pump in the region and the country. Eight states land on this week’s top 10 states biggest change list: Indiana (-14 cents), Ohio (-12 cents), Illinois (-11 cents), Michigan (-9 cents), Missouri (-6 cents), Wisconsin (-6 cents), Nebraska (-4 cents) and Kansas (-4 cents). Of note, Kentucky (+3 cents) was the only state in the region to see pump prices jump in the last seven days.
Compared to one month ago, all states in the region except two are paying less at the pump with Indiana (-40 cents), Ohio (-34 cents), Michigan (-30 cents), Illinois (-29 cents), Wisconsin (-18 cents) and Missouri (-14 cents) seeing double-digits drops. Only North Dakota (+1 cents) is paying more on the month in the Great Lakes and Central region.
After shutting down for two weeks following a spill, the Keystone pipeline resumed operations last Tuesday. The shutdown had minimal impact on gas prices in the region. The pipeline runs from Hardisty, Alberta to Cushing, Oklahoma and to Wood River/Patoka, Illinois.
With a small build on the week, gasoline inventories remain above the 45 million bbl level for the third consecutive week. According to OPIS, this inventory level mark is close to the five-year average for this time of the year.
South and Southeast
While gas price averages are cheapest in the South and Southeast, motorists are paying 20 cents or more at the pump compared to where they were one year ago. For example: New Mexico (+39 cents), Arkansas (+30 cents), Texas (+29 cents), Louisiana (+28 cents), Florida (+25 cents), Oklahoma (+25 cents), South Carolina (+24 cents), Mississippi (+24 cents), Alabama (+23 cents) and Georgia (+21 cents).
On the week, the states in the region saw moderate (at most two cent) drops in price.
Due to a small fire, a crude processing unit at ExxonMobil’s Beaumont, Texas, refinery is shut down and expected to be offline for two to three weeks, OPIS reported. The shutdown had no immediate impact on pump prices, but did spark jumps in the futures market.
The South and Southeast was the only region to see a drop (119,000 bbl) in gasoline inventory levels.
Mid-Atlantic and Northeast
States in the region tout some of the cheapest and some of the most expensive gas in the country. Tennessee ($2.28) and Virginia ($2.27) land on the top 10 states with the lowest gas price average this week, while Pennsylvania ($2.75), Washington, D.C. ($2.72), Connecticut ($2.69) and New York ($2.67) average among the top 10 most expensive gas prices. On the week, gas prices are cheaper or unchanged at pumps across the region. With a four-cent decrease, Delaware saw the biggest change.
The latest EIA report shows the Mid-Atlantic and Northeast region had the largest build of gasoline inventory in the country on the week with 2.6 million bbl added. Totaling at 56 million bbl, this is the largest inventory build and level for the region since late October.
Utah (+3 cents) saw the only jump in gas prices of any state in the region. Gas prices decreased two cents in Colorado and dropped by just one penny in Idaho, Wyoming and Montana on the week.
All states in the Rockies are paying significantly more for a gallon of unleaded gasoline on the year. Motorists in Colorado (+48 cents), Montana (+43 cents) and Wyoming (+43 cents) are seeing the biggest year-over-year increases.
Gasoline inventories increased (608,000 bbl) in the Rockies, totaling 28.8 million bbl according to the EIA. Since 2013, stocks generally level at the 28 million bbl mark through the month of November.
Oil market dynamics
On Friday, WTI increased 96 cents, closing at $58.36. The price per barrel of crude pushed higher last week and is likely to continue its climb following news on Nov. 30 from OPEC and some non-OPEC producers, led by Russia, that they have agreed to keep their production cuts in place through the end of December 2018. Participants in the agreement will continue to reduce output by 1.8 million barrels per day (bpd) in order to drain the global glut of oil that has suppressed oil prices.
Increased production and investment in drilling from producers outside of the production reduction agreement have slowed efforts to drain the global glut, which is why OPEC decided to extend its current agreement. All of this news signals that the U.S. is gaining export prowess through increased demand for exports, making up for losses in global supply due to OPEC’s agreement. As the U.S. moves toward exporting more oil and petroleum products than it imports, such as gasoline for the second year in a row, market observers may decide to pull back on optimistic expectations for the price per barrel of crude.
EIA reported last week that U.S. crude production hit its highest point since April 2015 in September of this year. Moreover, according to Baker Hughes, Inc., the active U.S. rig count grew by two last week, with rigs now standing at 749 – that is 272 more rigs than last year at this time.
Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.
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