As the national gas price average drops just two cents on the week to $2.47, states east of the Mississippi are paying as much as eight cents less at the start of this week. While gas prices are more expensive than a year ago, the past five weeks of sustained weekly declines indicate that demand may be leveling out alongside refineries and pipelines returning to pre-hurricane operations.
“Gas stations are steadily dropping pump prices for the majority of motorists, especially regional markets in the Northeast, Mid-Atlantic, South and Southeast,” said Jeanette Casselano, AAA spokesperson. “Drivers will see stabilized or decreasing prices at the pump throughout this month due to high refinery production rates and seasonal demand.”
In September, Hurricane Harvey drove gas prices to the highest price of the year – $2.67. That was a 32-cent increase inside of 12 days. Now nearly seven weeks post hurricane, gas prices have shown steady decline dropping a total of 20 cents since September 11, 2017.
- The nation’s top ten most expensive markets are: Hawaii ($3.11), California ($3.04), Alaska ($3.00), Washington ($2.93), Oregon ($2.77), Nevada ($2.73), Connecticut ($2.72), Idaho ($2.71), Washington, D.C. ($2.70) and New York ($2.67).
- The nation’s top ten markets with the largest weekly changes are: Ohio (+13 cents), Michigan (+12 cents), Indiana (+10 cents), South Carolina (-7 cents), Georgia (-7 cents), Tennessee (-7 cents), Florida (-7 cents), Texas (-7 cents), North Carolina (-6 cents) and Alabama (-6 cents).
South Carolina (-7 cents), Georgia (-7 cents), Florida (-7 cents), Texas (-7 cents) and Alabama (-6 cents) all land on this week’s states with the largest changes. The state with the cheapest average gas price in the region is Arkansas ($2.21) and the most expensive average in the region is Florida ($2.47).
As prices steadily decline for motorists in the South and Southeast, they will notice today’s gas prices are double-digits below prices compared to one month ago in Georgia (-29 cents), South Carolina (-28 cents), Florida (-25 cents), Alabama (-25 cents), Texas (-22 cents), Mississippi (-21 cents), Arkansas (-18 cents), Louisiana (-14 cents) and Oklahoma (-10 cents).
While the South and Southeast tout the largest inventory of any region in the country, levels are both 5 million bbl below pre-Harvey rates and levels this time last year. As inventories continue to build, motorists can expect gas prices to drop alongside the build.
Mid-Atlantic and Northeast
For a second week, Tennessee (-7 cents) and North Carolina (-6 cents) saw the largest drop in gas prices of all states in the region. The most expensive gas price averages in the region can be found in Connecticut ($2.72), the District of Columbia ($2.70), New York ($2.67) and Pennsylvania ($2.67), which were also the four most expensive regional states one month ago. However, the differentiator is that gas prices in these four states are 13 to 21cents cheaper on the month. Overall, gas prices in the region are following the national trend downward and are expected to continue that path throughout the fall.
With a 1.27 million bbl increase in gasoline inventories, the Mid-Atlantic and Northeast region saw the largest build of any region, though imports account for roughly 715,000 bbl of the build. Total inventories sit ahead of levels this time last year, albeit just by 278,000 bbl, according to the EIA
Great Lakes and Central
Defying the national trend, five states in the Great Lakes and Central region are paying more at the pump than a week ago: Ohio (+13 cents), Michigan (+12 cents), Indiana (+10 cents), Illinois (+4 cents) and Kentucky (+3 cents). This increase is flip-flopped from last week, when Ohio, Michigan and Indiana saw almost equal declines. All other states in the region are paying less at the pump, with Nebraska (-5 cents) seeing the largest decline on the week. Gas prices in the region have been volatile throughout the year due to varying factors: demand, hurricane impact, inventory levels, etc.
The Great Lakes and Central region was the only in the country to see gasoline inventories drop on the week. At 49.7 million bbl, inventories register at the lowest level since December 2016. This is the third straight week of inventory declines, according to the EIA. However, regional gasoline production is on the rise, having increased steadily for four weeks indicating that production is not outpacing regional demand.
Gas prices in the region continue to remain among the most expensive in the country, with Hawaii ($3.11), California ($3.04), Alaska ($3.00), Washington ($2.93), Oregon ($2.77) and Nevada ($2.73) leading the way. However, on the week, all prices in the region are less expensive except in Alaska where prices increased one cent, and Hawaii saw no change.
Gasoline inventory levels reached a 4-month high, according to EIA’s latest report, growing to 29.3 million bbl. The increase is a surprise given planned maintenance at various refineries and healthy exports in the region that were expected to keep inventory growth low. Additionally, despite dropping from last week, the refinery utilization rate of crude remains high at 88.3 percent in the region. The utilization rate is likely to climb back up, as more refineries return to typical production rates when scheduled maintenance is completed.
Gas prices continue to decline in the Rockies, but just by one to two cents. Prices across the region as of today are as follows: Idaho ($2.71), Montana ($2.60), Utah ($2.58), Wyoming ($2.50) and Colorado ($2.45).
Gasoline inventory levels in the region are at their highest since the end of June. High tourism throughout the summer months historically drives inventory levels low. They then build with the onset of fall. Data from the EIA report the week’s 648,000 bbl build pushes levels over 7 million bbl, which is a surplus, albeit it small, compared this time last year.
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI increased 85 cents to settle at $51.45. Moving into Monday and the rest of the week, oil prices may continue their upward trend. EIA’s latest report showed a 2.7 million bbl decline in crude oil stocks, which correlates with seeing an increase in gasoline stocks around the country. On the U.S. crude oil production side, the EIA report noted that there was an 87,000 b/d decline in production rates in the lower 48 states. That news followed Baker Hughes, Inc. reporting that the U.S. dropped 5 oil rigs last week, landing at a total of 743. When combined, both data points (crude production and oil rigs) may point toward reduced U.S. crude production and its potentially reduced contribution to global supply, which may help bolster the price per barrel of oil as the fall continues.
The International Energy Agency’s October Oil Market Report forecasted that three of the four quarters in 2018 will see the oil market in balance, assuming unchanged OPEC production and normal weather conditions. Based on the report, the global crude market is projected to see an inventory build of 800,000 b/d during the first quarter of 2018. Moreover, growth in oil demand is expected to match the increase in production next year from nonmember countries of OPEC, such as the U.S., and could cap oil prices throughout 2018. As a result, market observers will closely watch the upcoming OPEC meeting, scheduled for November 30 in Vienna. OPEC and non-OPEC members who have agreed to cut production through March 2018 will meet to discuss the status of the agreement and may decide to take additional measures to deepen the agreement’s market impact.
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.