Today’s national average price for regular unleaded gasoline is $2.35 per gallon, which is flat on the week, nine cents more than one month ago, and 22 cents more than last year. Compared to seven days ago, gas prices are more expensive in 27 states, cheaper in 12 states and flat in 12 states. The West Coast, Rockies and Midwest regions are seeing the bulk of the increases at the pump.
“Prices at the pump continue a slow, upward climb as the summer season draws to a close,” said Jeanette Casselano, AAA spokesperson. “As we get closer to Labor Day and demand and production rates grow, drivers will likely see some of the highest prices at the pump this year.”
- Largest weekly increases: Idaho (+9 cents), Indiana (+7 cents), Utah (+7 cents), Michigan (+6 cents), Ohio (+6 cents), Wyoming (+3 cents), Hawaii (+3 cents), Illinois (+3 cents), West Virginia (+3 cents) and Oregon (+2 cents).
- The nation’s top ten least expensive markets are: South Carolina ($2.08), Alabama ($2.10), Mississippi ($2.10), Arkansas ($2.11), Oklahoma ($2.12), Missouri ($2.14), Tennessee ($2.15), Virginia ($2.16), Texas ($2.16) and Louisiana ($2.16).
On average, gas prices on the West Coast increased two cents on the week. Hawaii is selling the most expensive gas in the country at $3.09 as California ($2.98) inches closer to the $3/gallon mark.
In the region, gasoline inventories dropped moderately on the week (200,000 bbl) as supplies tighten. Total inventory registers at 26.5 million bbl, which is the lowest levels seen on the West Coast in 2017 and two million bbl behind a year ago. Imports painted a bleak picture on the week; totaling 119,000 bbl compared the 375,000 bbl the week prior and below the year-ago level of 161,000 bbl.
As the country’s first total solar eclipse since 1979 approaches next week, August 21, Oregon ($2.70), which is in the path of totality, is likely to see gas prices increase. Oregon’s Department of Energy expects about one million visitors to the state, which will inevitably drive up demand for gasoline and gas prices.
As gasoline inventories in the region hover near a low for the year, three states in the region land on this week’s list of states with the largest weekly increases: Idaho (+9 cents), Utah (+7 cents) and Wyoming (+3 cents). Drivers in parts of Idaho ($2.65) and Wyoming ($2.38) can expect gas prices to increase in the coming week as both states expect an influx of tourists for the August 21 solar eclipse.
Great Lakes and Central States
Despite a nearly 800,000 bbl build in gasoline, low inventory levels are driving gas prices up in the Great Lakes and Central States. Three states in the region land on this week’s top states with the biggest increases: Indiana (+7 cents), Michigan (+6 cents) and Ohio (+6 cents). As we’ve seen for most of the year, the region remains volatile. Just last week these same three states saw comparable declines at the pump: Indiana (-8 cents), Michigan (-7 cents) and Ohio (-7 cents).
In the region on the week, gas prices increased in a total of seven states, decreased in three states and remained flat in three states. All states in the region with increases include: Indiana (+7 cents), Michigan (+6 cents), Ohio (+6 cents), Illinois (+2 cents), Kansas (+1 cent), North Dakota (+1 cent) and Wisconsin (+1 cent). States with decreases: Kentucky (-4 cents), Missouri (-3 cents) and Minnesota (-1 cent).
South and Southeast
The South and Southeast states are seeing gas prices fluctuate throughout the region. Three states are paying more than a week ago, albeit just one cent: Mississippi, New Mexico and Alabama, while four states are paying less: Florida (-2 cents), Texas (-2 cents), Oklahoma (-1 cent) and South Carolina (-1 cent). Prices remain flat on the week in Arkansas, Louisiana and Georgia.
According to the latest Energy Information Administration (EIA) report, the region saw a 1.4 million bbl increase in inventories on the week bringing totals close to 82 million bbl, marking the largest inventory of any region in the country. Overall, the South and Southeast inventory is 4 million bbl more than this time last year. However, as demand continues to remain strong into the end of summer, inventories are likely to fall in coming weeks.
Mid-Atlantic and Northeast
On average, consumers in the Mid-Atlantic and Northeast states are paying $2.36 a gallon – which is flat compared to last week. Only three states in the region saw gas prices increase: North Carolina (+2 cents), West Virginia (+2 cents) and Virginia (+1 cent). Notably, six states saw decrease: Delaware (-5 cents), Maryland (-2 cents), New Jersey (-2 cents), New Hampshire (-1 cent), Pennsylvania (-1 cent) and Rhode Island (-1 cent).
Similar to its neighboring gulf coast region, the Mid-Atlantic and Northeast states saw a 1.4 million bbl build in gasoline inventory. This is attributed to a doubling of imports (from 500,000 b/d to 910,000 bbl) and refinery rates at a notable nearly seven percent increase.
Oil market dynamics
After closing on the NYMEX at $48.82 per barrel on Friday, WTI started moving downward Monday morning amid concerns from investors that U.S. production will continue to add to the global crude glut. According to Baker Hughes, Inc. three oil rigs were added to the U.S. count last week, totaling 768, which is 372 rigs more than last year’s count at this time. Growth in active rigs has moved in the opposite direction of crude inventories, which have declined by over 33 million bbl for seven consecutive weeks. The current crude oil storage level of 475.4 million bbl is the lowest since early October, and total inventories, when compared to the five-year average, have moved lower to just over 66 million bbl. The reduction in inventories has given the market greater confidence, but the growing rig count remains a concern as it indicates that oil companies are still investing heavily in U.S. production.
Additionally, last week, the EIA published a report that pointed to a revised record gasoline demand at 9.842 million b/d for the week ended on July 28. The demand figure for the week ending on August 4 noted a small pullback, but overall the last four weeks of gasoline demand have been on par with that of a year ago. The recent good news for gasoline demand does not end there, as final monthly renderings for April and May pointed to record highs. If the trend holds, final readings for June and July are likely to follow suit, confirming that gasoline production by U.S. refiners and blenders has been running near record levels over the first seven months of 2017.
With strong gasoline production levels and seasonal demand staying on track, drivers will likely see prices continue to climb across the country. In fact, as OPEC seeks to re-double its efforts to rebalance the global oil market, any additional steps from it to curb growth in production may lead to higher oil prices. At a meeting in Abu Dhabi last week with OPEC and non-OPEC producers – all members of a pact that has agreed to cut production by 1.8 million barrels per day (bpd) until March 2018 – the group decided to take action, including curtailing exports, to comply more fully with the agreement. If those measures meet full success, it will likely lead to higher prices at the pump.
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.