Despite a surge in gasoline demand on the week, the national average price for gasoline is nearing an all-time low for the year at $2.26/gallon. February of this year was the last time the price of a gallon of regular unleaded gasoline was this low nationally.
On the week, gas prices fell in all but three states (Indiana, Ohio and Michigan) while all regions, except the Southeast, saw gasoline inventories drop. This is good news for people planning to travel for the Independence Day holiday. AAA forecasts 37.5 million American will drive to their holiday destination, which potentially can mean a small increase in holiday weekend gas prices. Today, consumers can find gas for $2.24 or less at 60 percent of gas stations in the country.
The price of gas has fallen for 24 consecutive days. Today’s national average is three cents cheaper than a week ago and eleven cents cheaper than a month ago. Heading into Independence Day weekend, gasoline is four cents less than a year ago. Record refinery rates, high gasoline and crude inventory, and less-than-favorable demand this year are among the contributing factors causing the downward price trend.
- The nation’s top ten markets with the largest yearly changes: Hawaii (+26 cents), Illinois (-22 cents), New Jersey (+19 cents), Ohio (-18 cents), Utah (+18 cents), Alaska (+17 cents), Wisconsin (-16 cents), Washington (+16 cents), Oklahoma (-15 cents) and Oregon (+14 cents).
- The nation’s top ten markets with the cheapest gas this week include: South Carolina ($1.93), Oklahoma ($1.95), Alabama ($1.99), Mississippi ($2.00), Missouri ($2.01), Tennessee ($2.02), Arkansas ($2.02), Virginia ($2.03), Texas ($2.06) and Kansas ($2.07).
With steady and strong gasoline demand, gas prices on the West Coast continue to be the most expensive in the country: Hawaii ($3.05), California ($2.96), Alaska ($2.84), Washington ($2.81), Nevada ($2.68), Oregon ($2.67) and Arizona ($2.28).
Even with a surge in gasoline imports on the week, gasoline stocks did not build in the region and all states saw a decrease in gasoline prices. Overall, supplies remain strong for the summer driving season in the region with stockpile levels up by half a million bbl compared to the same week last year. However, there is concern that maintenance at PBF Energy’s Torrance Refinery and Tesoro’s Golden Eagle refinery in Martinez, Calif., could crimp supply levels in the near future.
Idaho ($2.60) and Utah ($2.55) hold their spots as states with the most expensive gasoline price. Despite the region running on a gasoline supply deficit (compared to this week last year), all states saw prices decrease, which is in-line with the national trend, on the week: Wyoming (-4 cents), Colorado (-4 cents), Montana (-2 cents), Idaho (-1 cent) and Utah (-1 cent).
Great Lakes and Central States
One of the most volatile regions as of late, the Great Lakes and Central States saw some stability on the week. Ten (10) states saw prices decrease on average by 2 cents. Indiana (-8 cents), Illinois (-6 cents), Missouri (-6 cents) and South Dakota (-5 cents) all earned spots on the states with the biggest decrease list on the week. Meanwhile, three states saw the only increases in the country: Indiana (+7 cents), Ohio (+4 cents) and Michigan (+4 cents).
For the first time in three weeks, gasoline inventory declined. According to the Energy Information Administration (EIA), inventory sits at nearly 55 million bbl, similar to this time last year inventory levels.
South and Southeast
With a modest build of 1.5 million bbl in gasoline inventory, the South and Southeast region was the only to see a jump in the country on the week. As stocks continue to increase in the region, gas prices continue to fall. Three states carry gas prices under $2/gallon: South Carolina ($1.93), Oklahoma ($1.95) and Alabama ($1.99). Florida, saw the biggest decrease in gas prices in the region with a seven cent drop and earned a spot on the states with the biggest decrease list this week along with Texas (-5 cents) and Georgia (-4 cents).
Gasoline stocks in the region are healthy, sitting at 3.3 million bbl ahead of this time last year. The surplus is typical for the region this year.
Mid-Atlantic and Northeast
Gas prices have declined in every Mid-Atlantic and Northeast state, on average by three cents on the week, and in-line with the national trend. However, the price drop is an outlier given the region made the country’s largest gasoline inventory draw on the week (1.4 million bbl). With the draw, the region is sitting with gasoline inventories below a year ago levels. The draw indicates a surge in demand, which if continues could shoot gas prices on an upward trend in the week. Washington, D.C. ($2.46) and Pennsylvania ($2.45) lead the region with the most expensive gas.
Oil Market Dynamics
On Monday morning, the price per barrel of West Texas Intermediate crude oil opened at just above $43. The opening price follows a turbulent week for the market, where prices moved to their lowest level in 10 months. Last week’s report from the EIA showed that demand for crude oil remains robust as gross inputs at U.S. refineries have topped 17 million b/d in each of the past nine weeks. However, crude oil inventories remain high, with current storage levels near 500 million bbl, which is approximately 9 million bbl ahead of last year. Moreover, when looking at 5-year crude oil storage trends, the surplus is even more eye-opening: roughly 82 million more barrels are in storage now than five years ago. Last week, Baker Hughes, Inc. reported that the U.S. oil rig count grew by 11 last week, landing at 758 rigs – a three year high. The data points toward the rising tide of crude oil, which has contributed to prices dropping at the pump for drivers, and has helped to push the price per barrel down. The cheaper price per barrel has contributed to refineries producing record amounts of gasoline for most of the year.
Last week, the EIA noted that U.S. refinery capacity has increased by 659,000 barrels per day since mid-August 2015, which is the equivalent of building a new refinery in the U.S. Additionally, EIA highlighted that recorded weekly refinery gasoline output rates have hit their 24 highest points since the summer of 2015. This growing trend means that refineries are producing a record amount of gasoline that has easily met increasing demand from drivers and has left gasoline stockpiles at high levels. Meaning, the national gas price average will likely continue to drop until demand can surge to chip away at the surplus. However, Independence Day Weekend has the possibility to be an outlier.
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.