The national gas price average has been trending cheaper for 10 days. At $2.51, today’s price is three cents less than last Monday. On the week, 49 states are paying less at the pump for a gallon of regular gasoline. The District of Columbia and Hawaii saw their gas price increase by one cent. Prices have dropped between one and 15 cents elsewhere across the country.
“AAA expects to see gas prices trend cheaper through the year-end, decreasing as much as 20 cents for some motorists before year-end,” said Jeanette Casselano, AAA spokesperson.
Today, motorists can find gas for $2.50 or less at 63 percent of gas stations nationwide.
Gas prices in states within the West Coast region are among the most expensive in the country. In fact, current prices rank five of the region’s states as the top most expensive states in the country: Alaska ($3.26), Hawaii ($3.24), California ($3.19), Washington ($2.99) and Oregon ($2.84).
After a few weeks of slow growth and declining refinery rates, the region’s refinery utilization rate jumped above 86 percent last week – a rate higher than last year’s at this time. Demand has remained stronger than expected for the early part of fall, so an increasing utilization rate will close the supply gap and help keep stocks in check as winter draws closer.
Great Lakes and Central
Of all the regions, the Great Lakes and Central states are seeing the largest drops at the pump – some at double-digit rates on the week: Indiana (-15 cents), Ohio (-12 cents), Illinois (-10 cents), Michigan (-10 cents), Wisconsin (-6 cents), Kentucky (-6 cents), Missouri (-6 cents), Kansas (-4 cents) and Nebraska (-4 cents).
The Keystone pipeline remains shut down; however, it has not had an immediate impact on gas prices in the region. TransCanada still does not yet have a potential restart date for the pipeline, which runs from Hardisty, Alberta to Cushing, Oklahoma and to Wood River/Patoka, Illinois.
The latest Energy Information Administration (EIA) report shows regional gasoline inventory registers at 45 million bbl, which is about 3.2 million below levels this time last year.
South and Southeast
In the South and Southeast, motorists continue to see gas prices decline and trend toward pre-hurricane prices. In fact, five states in the region are selling the cheapest gas prices in the country: Alabama ($2.23), Mississippi ($2.24), South Carolina ($2.24), Texas ($2.26) and Arkansas ($2.27). While all states are seeing cheaper gas prices on the week, Oklahoma (-3 cents), Florida (-3 cents), Georgia (-3 cents) and Alabama (-3 cents) saw the largest decreases.
While gas prices in the region remain significantly higher than this time last year, Georgia is seeing the smallest change compared to last year (+27 cents). Oklahoma (+37 cents) has the largest year-over-year difference in gas prices.
Gasoline inventories had a small 439,000 build on the week, bringing levels above the 77 million bbl mark. The region carries the largest gasoline inventory in the country, according to the EIA.
Mid-Atlantic and Northeast
In the region, gas prices are cheaper on the week with Maryland seeing the largest decline (-3 cents). Prices dropped across the region except in Washington, D.C., where prices increased one cent on the week. The cheapest gas in the region can be found in Tennessee ($2.29) and Virginia ($2.30). These two states land on the top 10 states with the least expensive gas, while four states in the region land on the top 10 states with the most expensive gas: Pennsylvania ($2.77), Washington, D.C. ($2.74), Connecticut ($2.70) and New York ($2.68).
With a build of 546,000 bbl, the region saw the largest gasoline inventory increase in the country on the week. However, the region is also experiencing the largest deficit year-over-year, according to the latest EIA report. An uptick in imports is expected to help reduce the deficit.
Gas prices declined as much as two cents in the region on the week: Wyoming (-2 cents), Colorado (-1 cent), Idaho (-1 cent) and Utah (-1 cent). At $2.47, Utah’s gas price average today is eight cents less than one month ago, which is the second biggest monthly decrease of any state in the country. Similarly, Idaho (-4 cents) and Wyoming (-1 cent) are also seeing a month-over-month drop at the pump.
With a 43,000 bbl draw on the week, gasoline inventory in the region measures at 6.7 million bbl.
Oil market dynamics
On Friday, WTI hit $58.95 bbl – a multi-year high that the price per barrel has not come close to since June 2015. Expectations for an extension of the current OPEC and Russian production cut until December 31, 2018 fueled this spike. OPEC and non-OPEC members of the production reduction agreement will meet in Vienna on November 30, to discuss the fate of the agreement, which is currently set to expire in March 2018. Market observers have been awaiting this meeting to see if agreement participants will take additional measures to restrict supply in the global market, which could push oil prices even higher.
Increased oil production and exports from countries outside of the agreement, including the U.S., have acted as a counterforce to the agreement’s intended market impact. In fact, Baker Hughes, Inc. reported that the active U.S. oil rig count grew by nine last week, with the total now at 747. Moreover, oil production in the U.S. reached 9.7 million b/d last week, according to EIA’s latest report, a high not seen since April 1971. With the U.S. gaining a stronger foothold in the market, OPEC’s announcement following this week’s meeting will be heavily assessed for its potential impact on the market in 2018 and beyond.
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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