WASHINGTON, D.C. — At the start of May, the national gas price average is $2.90, which is three cents more than a month ago. Pump prices in April saw minimal variability compared to March, which increased 15 cents from start to finish. Stable crude oil prices amid fluctuating demand helped keep the national average price jumps nominal last month.
“While April saw minimal fluctuation, May is likely to see much larger increases alongside demand spikes, especially closer to Memorial Day weekend,” said Jeanette McGee, AAA spokesperson. “Compared to May 2019, U.S. gasoline demand is down only 4% and gas prices are on average just two cents more.”
On the week, the national average increased two cents. Ten states saw averages increase between five and eight cents, but the majority of states saw increases of one to three cents. The pump price changes come amid a flux in supply and demand. For the week ending April 23, the Energy Information Administration reported gasoline stocks saw a small 100,000 bbl build to reach the 135 million bbl mark. That is the highest supply rate since the end of February and an 8.3 million bbl surplus compared to the same time two years ago. While supply increased, demand saw a decrease of 3% to 8.87 million b/d.
Summer Fuel Supply
Last week, media reports surfaced that a shortage of fuel tank truck drivers may impact gasoline availability this summer. As gasoline demand increases, gas stations are working to adjust delivery schedules to keep pace. However, deliveries may be delayed in a small number of markets this summer causing select stations to see low to no fuel at some pumps for short periods, one or two days.
“With road trips expected to be popular this summer, some summer travel destinations, like beaches or mountains, may see some pumps affected. It is important to understand this is not a market-wide impact. Gas can be found at other stations within a market,” said McGee. “The U.S. is not looking at a gas supply shortage; there is ample gasoline supply across the country. It is just a matter of more frequent deliveries to stations to meet demand.”
In markets where this happened last month, it was contained within a brand/chain at a select number of pumps. As a rule of thumb in general, AAA recommends that motorists consider filling up when their fuel level hits a quarter of a tank.
- The nation’s top 10 largest weekly changes: Indiana (+8 cents), Illinois (+8 cents), Washington (+6 cents), Oregon (+6 cents), Alaska (+5 cents), California (+5 cents), Utah (+5 cents), North Carolina (+5 cents), Ohio (−5 cents) and Hawaii (+4 cents).
- The nation’s top 10 least expensive markets: Mississippi ($2.57), Texas ($2.57), South Carolina ($2.60), Louisiana ($2.60), Alabama ($2.63), Oklahoma ($2.66), Missouri ($2.66), North Carolina ($2.67), Arkansas ($2.67) and Tennessee ($2.69).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI decreased by $1.43 to settle at $63.58. Although prices ended the day with a decrease, supported by a strong dollar, the price of crude increased by nearly $1.50 per barrel on the week. Increased market optimism that crude demand will recover, despite surging coronavirus infection rates in Asia, helped to lift prices. Prices could continue to climb this week if the market remains optimistic. Additionally, prices increased last week after the Organization of the Petroleum Exporting Countries (OPEC+) and its allies, including Russia, recommended leaving in place a recent agreement to gradually increase crude production by at least 2.1 million b/d in May and June. At the next OPEC+ meeting on June 1, the cartel will determine crude output levels for July and August.
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.