At 56 percent of gas stations nationwide, consumers can find gas for less than $2.24, which is below today’s national average gasoline price of $2.29/gallon. Across the country, gas prices dropped in all but four states on the week. Prices in South Carolina have fallen below $2/gallon, while California is on the cusp of dropping below $3/gallon. The national average gas price has dropped for 17 consecutive days making today’s price five cents cheaper than both one week and one year ago, and six cents less than one month ago.
While gasoline demand saw new heights for Memorial Day, it has dropped for the first half of June. Meanwhile, high oil production rates in the U.S., coupled with news from the Organization of the Petroleum Exporting Countries (OPEC) that Libya and Nigeria increased output last month, could lead to gas prices across the nation continuing to fall through the end of June.
- The nation’s top ten markets with the largest monthly declines: Ohio (-17 cents), Indiana (-16 cents), Oklahoma (-12 cents), Michigan (-12 cents), Kentucky (-8 cents), North Dakota (-8 cents), Pennsylvania (-8 cents), South Carolina (-7 cents), New Mexico (-7 cents) and Texas (-7 cents).
- The nation’s top ten markets with the cheapest gas this week include South Carolina ($1.97), Oklahoma ($1.99), Alabama ($2.03), Mississippi ($2.04), Tennessee ($2.05), Arkansas ($2.06), Missouri ($2.07), Virginia ($2.07), Louisiana ($2.10) and Kansas ($2.11).
Still the most expensive gas markets in the country, prices in this region dropped by an average of two cents in every state except Hawaii. That state saw a two cent increase and was one of only two states to see an increase on the week (the other being Utah). Today’s West Coast prices are: Hawaii ($3.06), California ($3.01), Alaska ($2.87), Washington ($2.84) Nevada ($2.70), Oregon ($2.68) and Arizona ($2.29).
Rebounding from the lowest mark of the year last week, gasoline inventories added a strong 1.5 million bbl according to the U.S. Energy Information Administration (EIA). Gasoline imports were a major player in the inventory growth, picking up 11,000 b/d. If inventory continue to gain in the region without an increase in demand, prices could continue to drop.
Idaho and Utah lead the region with the highest gas prices, ($2.61) and ($2.57) respectively, while also earning a spot on this week’s top 10 states with the most expensive gasoline. Gas prices are volatile the in region, increasing in Utah (+4 cents), staying flat in Idaho, and dropping in Colorado (-3 cents), Montana (-1 cent) and Wyoming (-1 cent) on the week. The fluctuation of gas prices in the region has been an ongoing trend since May.
Great Lakes and Central States
As gasoline inventory rises for a second straight week, the region is seeing gas prices continue to drop compared to one month and one year ago. According to the EIA, inventory in the region sits just north of 55 million bbl, which is 4 million bbl more than this time last year.
The region continues to reap the benefit of seeing significantly cheaper gas in most states: Ohio (-38 cents), Indiana (-33 cents), Michigan (-28 cents), Illinois (-24 cents), Wisconsin (-18 cents) Kentucky (-16 cents) and Iowa (-9 cents). The remaining states in the region – Iowa, Kansas, Minnesota, Missouri, North Dakota, Nebraska and South Dakota – are seeing a moderate drop in gas prices compared to last year, on average four cents year over year. Growing inventory and mediocre demand will allow consumer to continue to reap the benefit of cheap gas prices.
South and Southeast
The region saw an unexpected 2.4 million bbl build in gasoline inventory, the largest jump on the week in the country by far. As stocks jump, the region’s gas prices drop by an average of four cents. South Carolina ($1.97) became the first state to see its average price at the pump move below $2/gallon. Other states saw similar decreases: Oklahoma ($1.99), Alabama ($2.03), Mississippi ($2.04), Tennessee ($2.05), Arkansas ($2.06) and Louisiana ($2.10).
Mid-Atlantic and Northeast
Prices at the pump dropped in every state in the Mid-Atlantic and Northeast, on average by 4 cents on the week; however, gas prices vary significantly, by a range of 43 cents, from state to state: Pennsylvania ($2.50), Washington, D.C. ($2.50), New York ($2.46), Connecticut ($2.46), Vermont ($2.36), New Jersey ($2.33), Rhode Island ($2.32), West Virginia ($2.32), Massachusetts ($2.31), Maine ($2.28), Maryland ($2.27), New Hampshire ($2.24), Delaware ($2.22) North Carolina ($2.15) and Virginia ($2.07). A variety of factors contributes to the varying gasoline price difference, including demand and state gasoline taxes.
Oil Market Dynamics
Still rebounding from last week’s losses, the price of a barrel of West Texas Intermediate (WTI) crude opened at just under $45 today. Last week, reports from IEA and OPEC revealed that global crude inventories are still growing. Adding to the oversupply, Libya and Nigeria, which are exempt from OPEC’s production cuts agreement, improved their output by 178,000 and 174,000 b/d, respectively, according to OPEC’s June report. Libyan production is now close to 800,000 b/d – the highest it has been since 2014 – while Nigeria could contribute an additional 200,000 b/d in the near future. Moreover, IEA’s monthly report stated that it expects non-OPEC production for 2017 to grow by 700,000 b/d, with the U.S. leading the way. All of this news left market watchers wondering what steps are needed to reduce supply in the market. Until global crude inventories decline, the price per barrel will likely remain below $50.
Last week, Baker Hughes, Inc. reported that the number of oil rigs has grown in the U.S. for another record-breaking week. After 22 weeks of continued growth, the U.S. now has 747 active oil rigs. Sustained growth in the production sector will lead to more oil in the pipeline for gasoline and other distillates production by refineries. Even as summer gasoline demand grew in previous weeks, it wasn’t a match for the rising tide of crude. It may be only a matter of time before market participants grow impatient with weak rebalancing efforts, leading them to undertake more drastic measures to bring the global supply of oil closer to the demand for refined products. Until then, drivers stand to benefit from the imbalance between oil production and gasoline refinery rates, which continues to push down the price of gas.
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.