(WASHINGTON, April 4, 2016) Despite increasing for 36 of the past 41 days, the national average is at its lowest price point for this same date since 2009. Today’s average price of $2.06 per gallon represents an increase of two cents on the week and 24 cents on the month. Pump prices continue to reflect year-over-year discounts, and drivers are saving 34 cents per gallon versus this same date last year.
The switchover to summer-blend gasoline at refineries has already taken place, and this special blend of fuel has begun to make its way to fuel terminals in many parts of the country, though it can take a few weeks because fuel travels through pipelines at four miles per hour. This blend costs more to produce, and drivers likely will notice higher prices in areas required to use this fuel, such as in the Northeast, over the next few weeks. In addition, continued refinery maintenance and rising demand may also lead to higher prices in some areas. Although prices are expected to move higher leading into the summer driving season, consumers will likely continue to benefit from comparative savings due to the overall abundance of supply and the lower price for crude oil.
Drivers in California ($2.79) are paying the nation’s highest averages at the pump. Gas prices in the Golden State have moved higher due to regional supply challenges, though these issues reportedly have begun to ease, and prices in the region may soon recover as a result. Regional neighbors Hawaii ($2.60), Nevada ($2.45), Washington ($2.30) and Alaska ($2.27) join in the rankings as the nation’s top five most expensive markets for gas. Averages in nearly half (23) of the states are below the $2 per gallon threshold, and motorists in Oklahoma ($1.82) and South Carolina ($1.85) are paying the lowest prices at the pump.
Prices have moved by more than a nickel per gallon on both ends of the spectrum week-over-week, and gas prices are likely to continue to fluctuate in the near term due to imbalances between supply and demand. Gas prices are up in the majority of states (37) on the week, with the largest increases in price seen by drivers in Michigan (+11 cents), Arizona (+8 cents) and Utah (+6 cents). Prices have fallen in 13 states over this same period, and drivers in Minnesota (-6 cents), Oklahoma (-4 cents) and Iowa (-3 cents) are experiencing the largest weekly savings in the price of gasoline.
Prices are up by more than a nickel per gallon for the month in the vast majority of states (48), and consumers in 45 states and Washington, D.C. are paying double-digit premiums month-over-month. Averages are up by a quarter or more per gallon on the month in 21 states, with the biggest jumps in price occurring in states west of the Rockies: Arizona (+57 cents), Nevada (+42 cents) and California (+35 cents).
Drivers in every state continue to save on gasoline compared to a year ago. Gas prices in 46 states and Washington, D.C. are down by more than a quarter per gallon for the year, with the largest discounts seen by motorists in Alaska (-64 cents), Oregon (-54 cents) and Hawaii (-53 cents).
Oversupply continues to characterize the global oil market, and prospects for an agreement between OPEC and non-OPEC countries to freeze output seem increasingly unlikely as both Iran and Russia significantly increased production last month. Iranian oil is returning to market following the removal of sanctions and the country has said it will not freeze production until it regains market share. Supply and demand fundamentals continue to point to a bearish market for crude oil, and both Brent and West Texas Intermediate closed out the week at lows unseen since mid- and early-March.
Market watchers continue to monitor news of U.S. production, which according to the latest data from the EIA, fell for the fourth consecutive week. Additionally, the number of oil rigs operating in the U.S. declined by 10. Neither factor has yet to translate to movements in the price of crude oil, likely due to the markets extreme oversupply.
WTI closed out Friday’s formal trading session on the NYMEX down $1.55 and settled at $36.79 per barrel.
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.