Gas prices edged up higher fractions of a penny over the weekend to reach today’s average price of $2.28. This is seven cents less per gallon on the month and an increase of 58 cents per gallon compared to this same date last year.
Gas prices have remained relatively steady the past month due to a well-supplied crude oil market. Today the Organization of the Exporting Petroleum Countries (OPEC) released their Monthly Oil Market Report showing that participating countries implemented 90 percent of the agreed upon production cuts, which took effect on January 1, 2017. Despite production cuts by OPEC, the market remains overfed due to increased U.S. drilling and production.
- The nation’s top five most expensive markets are: Hawaii ($3.11), California ($2.87), Washington ($2.73), Alaska ($2.73) and Pennsylvania ($2.53).
- Averages are down in many states, with the largest monthly savings experienced by: Delaware (-18 cents), Ohio (-17 cents), West Virginia (-16 cents), Illinois (-15 cents) and Wisconsin (-13 cents).
Gas prices on the West Coast remain the highest in the nation, with all states in the region landing on the list of top 10 most expensive U.S. markets: Hawaii ($3.11), California ($2.87), Washington ($2.73), Alaska ($2.73), Oregon ($2.52) and Nevada ($2.51). Prices in the region have crept higher due to some refinery maintenance last week. OPIS reports that Chevron shutdown two production units at its 295,000-b/d refinery in El Segundo, California, for unplanned maintenance last Monday, while the company’s 257,200-b/d Richmond, California, refinery was also closed last week due to a reported problem with production equipment. According to the latest Energy Information Administration (EIA) report, West Coast gasoline inventories dropped by 339,000 bbl to 30.305 million bbl. This was the third consecutive week of production declines in the region.
Prices in the region have remained relatively stable, only moving by +/-3 cents or less in most states over the past month. Prices tend to be geographically insulated from movement tied to global crude oil prices. Regional prices may increase this spring as seasonal effects like increased demand and the switchover to more expensive-to-produce summer-blend gasoline take effect.
Midwest and Central States
Prices in the Central region remained relatively stable over the past week while parts of the Great Lakes region saw dramatic increases: Indiana (+12 cents), Michigan (+8 cents) and Ohio (+6 cents). Chicago gasoline spot prices jumped last week following reports of a fire at CITGO’s 185,200 b/d refinery in Lemont, Illinois. OPIS also reports unplanned maintenance at Husky Energy’s 170,000 b/d refinery in Lima, Ohio. The latest EIA report shows that Midwest gasoline inventories climbed to 60.251 million bbl last week while gasoline production also increased to 2.435 million b/d.
Northeast and Mid-Atlantic
Drivers in much of the Northeast and Mid-Atlantic regions saw prices decrease over the past week with Washington, D.C. (-3 cents), West Virginia (-3 cents), North Carolina (-2 cents) and Pennsylvania (-2 cents) all topping the list of largest weekly declines. The latest EIA report shows that East Coast gasoline inventories increased by 300,000 bbl to 73.8 million bbl, expanding on last week’s record storage levels. In addition, crude oil imports have more than doubled along the East Coast, moving from 521,000-b/d to a total of 1.049 million-b/d last week.
South and Southeast
Drivers in the South and Southeastern quadrant of the U.S. continue to enjoy some of the lowest prices in the nation. Six states in the region rank in the top-ten lowest prices: South Carolina ($2.03), Alabama ($2.05), Mississippi ($2.07), Texas ($2.09), Oklahoma ($2.11) and Louisiana ($2.12). The latest EIA report shows a national drop in gasoline inventories that was driven by a 2 million bbl decline in the Gulf Coast region.
Oil Market Dynamics
Monday morning crude oil prices slipped slightly despite reports that OPEC members cut 890,000 barrels of oil per day in January. OPEC’s Monthly Oil Market Report stated that participating countries successfully implemented 90 percent of the agreed production cuts they pledged in last year’s historic deal. It also showed that some producers, like Saudi Arabia, cut more than was originally required. In November of last year, OPEC and non-OPEC countries agreed to cut the amount of oil they were producing collectively by 1.8 million barrels per day for six months, starting on January 1.
Any gains this report may have resulted in have been tempered by the continued increase in U.S. drilling and production. According to Baker Hughes, over the past week the U.S. added eight more oil rigs- bringing the total count to 591, which is the highest number since October 2015. Traders will continue to watch for cartel production compliance and any fluctuations in U.S. production. At the close of formal trading on the NYMEX, WTI was up 86 cents, settling at $53.86 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.