After holding steady for nine days, the national gas price average is slowly declining at the start of the Thanksgiving week. At $2.54, today’s national gas price average is two cents less than one week ago and 40 cents more than a year ago. However, the more expensive year-over-year pump price is not stopping Americans from hitting the road for holiday travel.
“Nearly 46 million Americans will travel more than 50 miles away from their home by car this holiday. Many will be thankful to see gas prices trending cheaper in cities across the country,” said Jeanette Casselano, AAA spokesperson. “Since 2014, the national gas price average has dropped one to five cents heading into the Thanksgiving week.”
Motorists can find gas for $2.50 or less at 55 percent of gas stations in the country.
The West Coast continues to sell the most expensive gas with Alaska $3.27 (+6 cents) leading the region and topping all states’ gas prices. Hawaii ($3.23) and Arizona ($2.40) saw a slight increase, albeit one cent on the week. California ($3.21) is down three cents on the week and Nevada ($2.73) is down one cent. Oregon ($2.85) and Washington ($3.00) saw no change on the week.
According to the latest Energy Information Administration’s (EIA) report, total gasoline stocks grew to 28.2 million bbl – which is in line with the five-year average for the region. Refinery utilization rates in the region continue to sit above 86 percent, which has given the region a comfortable supply and demand balance sheet and will help prices stabilize ahead of the Thanksgiving holiday.
Great Lakes and Central
Gas prices in the region are volatile – increasing, stabilizing and decreasing – throughout the Great Lakes and Central states. With a double-digit decrease, Michigan has the country and the region’s largest decline at 12 cents. Also making the national spotlight for the region, Illinois ($2.70) lands on this week’s top 10 states with the most expensive gas in the country.
On Thursday, November 16, the Keystone pipeline was shut down due to a spill at a section of the pipeline in Marshall County, South Dakota. Over the weekend, TransCanada said that it does not yet have a potential restart date for the pipeline, which runs from Hardisty, Alberta, to Cushing, Oklahoma, and on to Wood River/Patoka, Illinois. While the pipeline is shut down, crude oil deliveries to some Midwestern refineries that draw from the pipeline may be reduced. In addition, crude inventory levels at Cushing, Oklahoma, may drop due to the delivery disruption. “The impact to gas prices in the Midwest will be based on the length of time the pipeline is down,” added Casselano.
Compared to one year ago, five states in the region are paying 50 cents more for a gallon of gasoline: Illinois (+59 cents), Indiana (+58 cents), Minnesota (+55 cents), Wisconsin (+54 cents) and Michigan (+51 cents). Heavy refinery maintenance this fall is one the factors that has contributed to the year-over-year hefty price increase.
After nearly two months of straight declines, regional gasoline inventory had an impressive 1.3 million bbl build. Overall, inventory stands 2.5 million bbl below levels this time last year. However, ExxonMobil’s Joliet refinery in Illinois is resuming operations following planned maintenance, which can help to alleviate the differential.
South and Southeast
Three months following Hurricane Harvey, gas prices in the South and Southeast are again among the cheapest in the country with seven states landing on this week’s top 10 states with the least expensive gas for a consecutive week: Alabama ($2.25), Mississippi ($2.26), South Carolina ($2.27), Texas ($2.28), Arkansas ($2.29), Oklahoma ($2.31) and Louisiana ($2.33). Despite the cheap prices, two states landed on this week’s top 10 states with the largest changes this week. Louisiana saw a three-cent jump, while Florida saw prices decrease four cents.
Gasoline inventories took a substantial 1.4 million bbl dip on the week. This was the second straight week of inventory declines bringing total levels to 76.5 million bbl, according to the EIA. The region has been steadily exporting inventory.
Mid-Atlantic and Northeast
Gas prices in the Mid-Atlantic and Northeast region either are seeing no change or small declines at the pump on the week with Delaware (-3 cents) seeing the largest decrease. Pennsylvania ($2.78), Washington, D.C. ($2.73), Connecticut ($2.71), New York ($2.69) and Rhode Island ($2.61) carry the most expensive gas in the region. At $2.31, Virginia touts the cheapest of all Mid-Atlantic and Northeast states.
Compared to last Thanksgiving week, motorists in the Mid-Atlantic and Northeast states are paying more at the pump, anywhere from 41 to 21 cents more. Pennsylvania pump prices have seen the biggest change year-over-year.
The relatively small changes in gas prices reflect the EIA’s data that the region had a small (525,000 bbl) build on the week. At nearly 53 million bbl, inventory levels for the region sit 3.2 million below this time last year. The year-over-year deficit is attributed to a lack of gasoline imports as of late.
With a three-cent increase, Montana lands on this week’s top 10 states with the largest change on the week. Prices remained stable in Idaho ($2.65), Colorado ($2.55) and Wyoming ($2.53). While motorists throughout this region are paying more compared to Thanksgiving week 2016, Colorado (+47 cents) motorists are seeing the largest year-over-year change in the region, while Utah (+16 cents) is seeing the smallest year-over-year change in both the region and the country.
With a 217,000 bbl draw on the week, gasoline inventory in the region measures at 6.8 million bbl. Today’s levels are about a half a million less than this time last year.
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI increased $1.41 to settle at $56.55. The price per barrel of crude oil is likely to continue gaining throughout the week after EIA’s latest report showed that crude inputs into refineries, for production of products like gasoline, grew by 250,000 b/d on the week to land at 16.9 million b/d. On the flip side, crude oil inventories ballooned to 1.9 million bbl, but are still lower than where they were at this time last year. Increased oil inventories and domestic crude production, which reached an all-time high at 9.65 million b/d last week, have contributed to growth in crude exports as they rose to 1.12 million b/d.
After recent growth in the U.S. active oil rig count, last week’s count remained unchanged at 738. This news may give market observers hope that oil prices may push even higher ahead of OPEC’s meeting on November 30, in Vienna. However, recent growth in U.S. oil production may only underscore that other countries, such as the U.S., will continue to fill the void left by other oil producers. At the upcoming meeting, OPEC and non-OPEC member countries that are a part of the production reduction agreement to curtail supply may decide to extend the agreement beyond its current expiration date at the end of March 2018. All eyes will remain on key countries in the agreement, such as Russia and Saudi Arabia, to see if they signal a willingness to extend the agreement through the end of the year or deepen the production cuts.
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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