The national average price for a gallon of gasoline dropped two cents on the week to $2.46. East Coast and Midwest states are seeing the largest drops in gas prices – as much as six cents – in the last week. While a small number of states, who historically experience ongoing volatility, are seeing increases: Indiana (+11 cents), Michigan (+8 cents), Ohio (+4 cents), Hawaii (+1 cent) and Illinois (+1 cent). Drivers can expect pump prices to continue to drop heading into the holiday season as supply strengthens and fall gasoline demand weakens.
“Nationally, gas prices are 10 cents cheaper on the month and will continue to drop as we count down the days to the holidays,” said Jeanette Casselano, AAA spokesperson. “AAA expects gasoline demand to weaken throughout the winter, which translates to better prices at the pump.”
Consumer gasoline demand is registering under 9 million b/d for the second consecutive week, while gasoline inventories increased by nearly 7 million bbl, according to the Energy Information Administration (EIA).
- The top ten states with the largest weekly changes are: Indiana (+11 cents), Michigan (+8 cents), Kentucky (-6 cents), Ohio (+4 cents), Delaware (-4 cents), Maine (-4 cents), Kansas (-4 cents), Iowa (-4 cents), Wisconsin (-4 cents) and New Mexico (-3 cents).
- The nation’s top ten least expensive markets are: Oklahoma ($2.19), Alabama ($2.20), South Carolina ($2.21), Mississippi ($2.21), Arkansas ($2.22), Missouri ($2.22), Texas ($2.22), Tennessee ($2.25), Louisiana ($2.27) and Virginia ($2.27).
Prices in the West Coast region are among the highest in the country. Six states in the region are on the top ten most expensive list for gasoline prices: Hawaii ($3.29), Alaska ($3.21), California ($3.13), Washington ($2.95), Oregon ($2.80) and Nevada ($2.68). However, on the week, gas prices in these states are down at least two cents, while Hawaii’s price increased by a penny.
The latest report from the EIA shows that total gasoline stocks in the region hit nearly 30 million bbl, the highest point since April 29. Weak demand contributed to the build, even as gasoline production in the region fell to 1.48 million b/d, and will continue to help prices decline throughout the fall and winter.
Great Lakes and Central
Gas prices in the region range from $2.22 (Missouri) to $2.51 (Michigan). In many states, drivers are paying as much as five cents less at the pump compared to last Monday, except for those filling up in Indiana (+11 cents), Michigan (+8 cents) and Ohio (+4 cents).
Of note, last Monday Kentucky was the only state in the region to see pump prices jump. Today, gas prices have decreased six cents, which is the largest decrease of any state in the country on the week.
Adding 1.6 million bbl, the region’s gasoline inventories register at 47.2 million bbl. This is the largest inventory total for the Great Lakes and Central states since mid-October, yet two million bbl below this time last year.
South and Southeast
On the week, most South and Southeast states are seeing moderate gas price drops – two to three cents. The region is home to the top five states with the cheapest gas in the country: Oklahoma ($2.19), Alabama ($2.20), South Carolina ($2.21), Mississippi ($2.21) and Texas ($2.22). At $2.41, Florida carries the most expensive gas of all states in the region, which is about 20 cents more than one year ago.
There was a 1.5 million bbl build in gasoline inventory. With 78.4 million bbl in total, the South and Southeast region carry the largest amount of inventory in the country. Second largest is Mid-Atlantic and Northeast with 58.4 million bbl, a 20 million bbl difference.
Mid-Atlantic and Northeast
As gas prices drop for every state in the region, two states land on this week’s list of top 10 largest declines: Delaware (-4 cents) and Maine (- 4 cents). Despite recent declines, Washington, D.C. ($2.70) averages among the most expensive gasoline in the region along with Pennsylvania ($2.73), Connecticut ($2.67) and New York ($2.65).
Compared to one month ago, motorists in the Mid-Atlantic and Northeast are paying less for a gallon of gasoline, with Delaware (-14 cents) seeing the largest regional drop.
For the fourth consecutive week, gasoline inventories increased in the region. With a 2.4 million bbl build, Mid-Atlantic and Northeast sit at 58.4 million bbl – the largest amount of inventory carried by this region since the beginning of September.
Across the Rockies, motorists are paying two to three cents less at the pump on the week: Idaho (-3 cents), Utah (-3 cents), Colorado (-3 cents), Wyoming (-2 cents) and Montana (-1 cent). The most expensive gas in the region is found in Montana ($2.62) and Idaho ($2.61).
Compared to this time last year, Montana (+43 cents), Colorado (+42 cents), Wyoming (+40 cents) and Minnesota (+36 cents) land on the top 10 list of states with largest year-over-year increases.
With a build of 258,000 bbl, gasoline inventories jumped above the 7 million bbl mark for the first time in four weeks.
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI increased 67 cents to settle at $57.36. Price volatility kicked into high gear last week for crude prices, amid reports of a potential oil worker strike in Nigeria and financial woes in Venezuela potentially impacting its oil production. Nigeria was not subject to the OPEC 2017 oil reduction agreement and as a result, their crude oil exports and market share grew. If the strike occurs, Nigeria’s oil deliveries may be interrupted and cause supply constraints in the global market. For Venezuela, a large-scale default on its debt would lead to it losing access to capital needed to continue producing oil. As a major global exporter, any reduction in the country’s production level is certain to rattle the market and drive prices up.
In additional news, this morning, the energy minister for the United Arab Emirates said that non-OPEC and OPEC countries that have agreed to cut production through December 2018 will announce an exit strategy from the production agreement in June 2018. Although the agreement will still be in effect until the end of 2018, early signals about the end of the agreement may give market observers greater confidence in knowing that global crude supply has been curtailed and prices are likely to keep riding high.
This news comes after EIA’s latest report showed that U.S. crude stocks fell by 5.6 million bbl. The large drawdown demonstrates the U.S.’ growing export prowess, with EIA reporting that crude exports reached 1.4 million b/d last week compared to 500,000 b/d at the same time last year. Moreover, Baker Hughes, Inc. reported that the number of active oil rigs in the U.S. increased by two last week, bringing the total number to 751.
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.