Gasoline demand has dropped significantly since the beginning of the month, down from 8.8 million b/d to 8.2 million b/d, according to the latest Energy Information Administration (EIA) report. This latest demand measurement is the lowest since mid-June. While the drop isn’t out of the ordinary for this time of year, people tend to drive less in the fall, it is a staggering 14% less than last October. On the week, gasoline stocks increased to 227 million bbl, putting total supplies at a 4 million bbl surplus compared to this time last year.
“The U.S. has a very healthy level of gasoline stocks due to lower demand and that is keeping gas prices low,” said Jeanette Casselano McGee, AAA spokesperson. “The majority of states have cheaper gas prices compared to last month, many paying 3 to 8 cents less. That downward trend at the pump is likely to continue.”
This summer brought an increase in demand compared to spring, but with coronavirus cases increasing, activity at the pump is declining – both fill-ups and prices. Today’s national average is $2.16, which is the same price as last week, 2 cents cheaper than last month and 44 cents less than last year. On the week, only five states saw gas prices increase: Ohio (+7 cents), Kentucky (+6 cents), Michigan (+5 cents), Indiana (+1 cent) and Illinois (+1 cent). Of the states with cheaper weekly prices, 20 averages are 2 to 5 cents less than last Monday.
It is a little more than a month until the end of the Atlantic hurricane season, which is proving to be one of the most active on record. A threat to the Gulf of Mexico — Tropical Storm Zeta — is forecasted to become a hurricane by Wednesday. The National Hurricane Center is warning the storm could bring storm surge, rainfall and high winds from central Louisiana to the western Florida Panhandle later this week. It’s most likely that Zeta, similar to other tropical storms and hurricanes from earlier this season, will not have an impact on gas prices nationally due to the high level of gasoline stocks in the United States.
- The nation’s top 10 largest weekly changes: Ohio (+7 cents), Kentucky (+6 cents), Michigan (+5 cents), Florida (-5 cents), West Virginia (-4 cents), Oklahoma (-3 cents), Minnesota (-3 cents), North Carolina (-3 cents), Delaware (-3 cents) and South Carolina (-3 cents).
- The nation’s top 10 least expensive markets: Missouri ($1.82), Mississippi ($1.83), Oklahoma ($1.84), Texas ($1.85), Arkansas ($1.85), Louisiana ($1.88), South Carolina ($1.88), Alabama ($1.89), Tennessee ($1.91) and Kansas ($1.92).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI decreased by 79 cents to settle at $39.85. Domestic crude prices decreased in light of market concern about increasing coronavirus infections worldwide, which could lower crude demand. The decrease in price occurred despite EIA’s weekly report showing that total domestic crude inventories dropped by 1 million bbl to 488.1 million bbl. If demand concerns continue this week, crude prices could decrease further.
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.