Today’s national average is $2.37 – one cent more than a week ago, two cents more than a month ago and five cents more than a year ago. Rising gasoline demand has resulted in dropping gasoline inventories across the country, according to the latest Energy Information Administration’s (EIA) report. Last week, U.S. demand for gasoline jumped 252,000 b/d to 9.7 million b/d, the highest level this year, while gasoline inventories dropped by 800,000 barrels (bbl). If the trend continues, consumers can expect to see summer gasoline prices potentially return to the high prices seen in April, when the national average for a gallon of gasoline was $2.42.
- The nation’s top ten markets with the biggest changes in the last week include: Ohio (-7 cents), Utah (+6 cents), Indiana (-6 cents), Delaware (+6 cents), Michigan (-6 cents), Missouri (+5 cents), Kansas (+4 cents), Iowa (+4 cents), Maryland (+4 cents) and Colorado (+4 cents).
- The nation’s top ten markets with the most expensive gas include: California ($3.10), Hawaii ($3.07), Alaska ($2.90), Washington ($2.87), Nevada ($2.74), Oregon ($2.73), Idaho ($2.59), Pennsylvania ($2.58), Washington, D.C. ($2.55) and Connecticut ($2.51).
- Gasoline prices vary significantly within the country due to, among other factors, regional supply and demand, gasoline specification requirements and taxes.
Drivers in California are seeing the largest weekly increases (+ 4 cents). Regionally, prices fluctuated between +2 cents and –1 cent on the week. Every state earned a spot on the top 10 weekly list of the most expensive markets: California ($3.10), Hawaii ($3.07), Alaska ($2.90), Washington ($2.87), Nevada ($2.74) and Oregon ($2.73).
Trickling into June is the region’s supply concerns sparked by May’s unplanned and planned refinery maintenance in the region. Gasoline inventories remain relatively unchanged (from the week prior) and at a two-month low while total West Coast gasoline production fell to a three-week low.
Idaho leads the region for the highest gas prices, increasing + 4 cents to $2.59, and also lands on this week’s top 10 list of most expensive markets. With a +6 cents increase, Utah earned a spot on the top 10 list of largest weekly increases. Meanwhile, other states in the region saw penny increases at the pump: Colorado (+4 cents), Wyoming (+1 cent) and Montana (+1 cent).
Great Lakes and Central States
The region continues to see the most volatility of any market in the country. Prices dropped by as much as seven cents in some states while increasing by four cents in others. Despite seeing increases ahead of Memorial Day weekend, Ohio (-7 cents), Indiana (-6 cents), Michigan (-6 cents) and Kentucky (-3 cents) are all posting cheaper gas prices than a week ago, while Missouri (+5 cents), Kansas (+4 cents), Iowa (+4 cents), Wisconsin (+4 cents), Minnesota (+3 cents) and Nebraska (+2 cents) all saw prices increase on the week.
While the state of Ohio mostly saw gasoline price increases in May, Southwest Ohio drivers can expect to see lower summer gasoline prices thanks to a switch to higher RVP (volatility) gasoline, according to the Environment Protection Agency (EPA). In April, the EPA approved the removal of Ohio’s low RVP fuel requirements previously required for summertime (June 1 to Sept. 15) in the Cincinnati and Dayton areas – allowing these markets to use higher RVP gasoline in summer months. The low RVP fuel requirements are no longer the cost-effective approach for reducing ozone as when the program was initiated, according to Ohio EPA.
South and Southeast
In the South and Southeast, gasoline prices are up to 33 cents below the national average. South Carolina ($2.04) tops the weekly list of cheapest markets and even saw a decrease (-6 cents) on the week. With the exception of South Carolina, prices in the region are trending slightly higher on the week: Georgia (+3 cents), Arkansas (+2 cents), Tennessee (+2 cents), Mississippi (+1 cent) and Louisiana (+1 cent)
Mid-Atlantic and Northeast
Growing demand for gasoline pressured pump prices higher across the Mid-Atlantic and Northeast regions. Delaware (+6 cents) and Maryland (+4 cents) saw the biggest price increases while Pennsylvania ($2.58), Washington, D.C. ($2.55), Connecticut ($2.51) and New York ($2.51) all made the top 10 list of largest weekly increases.
OPIS reports that next year, Pittsburgh drivers could see a drop in summer gasoline prices as the state considers switching to a cheaper-to-produce, higher RVP gasoline for summer months. The switch could occur as early as summer 2018 and is similar to the decision made by Ohio’s EPA.
Oil Market Dynamics
The price per barrel of crude oil opened at less than $50 on Tuesday morning. The market remains lukewarm after last Thursday’s meeting with OPEC and non-OPEC producers regarding an extension of production cuts failed to generate more pronounced actions from the cartel. Although the group agreed to extend the cuts through March 2018, market watchers were not surprised by the move and hoped that OPEC would take more drastic measures, like deepening the cuts beyond 1.8 million barrels per day. In advance of the heavily traveled Memorial Day weekend, the market made some gains on Friday that helped to narrow the market’s losses after OPEC’s meeting.
OPEC’s efforts to rebalance the market continue to be thwarted by rising oil production in the US. According to Baker Hughes, Inc., drillers in the US added two rigs last week, marking 19 weeks of continued growth and landing at an eye-popping 722 rigs. The number is the highest since April 2015. The bright spot in the market is the advent of summer, which typically sees more drivers on the road and usually leads to greater demand reducing gasoline inventories in the US. Elevated demand would require refineries to deplete ever-increasing stocks in storage to make more gasoline and other refined products. After last week’s EIA data showed that gasoline demand in the US is increasing, market watchers will look at this week’s report to see if the trend continues.
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.