After dropping to a low of $1.76 in April, the national gas price average is pennies away from hitting the $2/gallon mark. Today’s average is $1.96, which is eight cents higher than a week ago, 19 cents more than last month, but still a significant 87 cents cheaper than the end of May 2019.
The more expensive pump prices can be attributed to fluctuations in crude and demand. In the past week, crude oil hit its highest price point – nearly $34 per barrel – since the Administration declared the COVID-19 outbreak a national emergency and many states started implementing stay-at-home restrictions. While demand has been increasing since the end of April, it is down 28% compared to the first three weeks of May last year.
“Americans have seen significantly cheaper-than-normal gas prices the past two months. However, those low prices – as well as crude oil prices – have been pushing more expensive” said Jeanette Casselano, AAA spokesperson. “While motorists will see pump prices continue to increase, AAA does not expect the summer average to be as expensive as last year’s season.”
One factor that could cause a sudden spike in gas prices is the Atlantic hurricane season, which is June 1 through November 30. The National Oceanic and Atmospheric Administration predicts the 2020 season will be above-normal, potentially resulting in 13-19 named storms. An average Atlantic hurricane season typically produces 12 named storms, including three major hurricanes.
- The nation’s top 10 largest weekly increases are: Colorado (+16 cents), Utah (+15 cents), Kentucky (+14 cents), Idaho (+12 cents), Minnesota (+12 cents), Michigan (+11 cents), North Dakota (+11 cents), Missouri (+11 cents), Indiana (+10 cents) and Delaware (+10 cents).
- The nation’s top 10 largest monthly increases are: Wisconsin (+71 cents), Ohio (+58 cents), Michigan (+55 cents), Indiana (+51 cents), Illinois (+44 cents), Kentucky (+40 cents), Iowa (+40 cents), Minnesota (+33 cents), Idaho (+28 cents) and Oklahoma (+27 cents).
Great Lakes and Central States
Gas prices continue to push more expensive with one dozen Great Lakes and Central states seeing an increase of a dime or more on the week. Kentucky (+14 cents), Minnesota (+12 cents), North Dakota (+11 cents), Missouri (+11 cents) and Wisconsin (+10 cents) saw the largest jumps in the region.
While state gas price averages across the region are more expensive on the month, they continue to be cheaper compared to this time last year by 75 cents to nearly a dollar.
Regional refinery utilization saw a 3% increase – up to 73% – while gasoline stocks held steady at 54 million bbl, in the Energy Information Administration (EIA) latest weekly reports. Since mid-March, stocks have fluctuated to a high of 60.5 million bbl. However, this latest measurement is the lowest level of the year, which is contributing to more expensive gas prices recently.
South and Southeast
Florida ($1.88) and Oklahoma ($1.63) saw the largest weekly increases amid all South and Southeast states, while Louisiana (+2 cents) saw the smallest increase. For another week, the region remains home to the cheapest state gas price averages. Mississippi ($1.58), Arkansas ($1.61), Texas ($1.62), Alabama ($1.63), Louisiana ($1.63) and Oklahoma ($1.64) carry the least expensive averages in the region and the country.
The latest build in gasoline stocks have driven total regional levels up to 90.2 million bbl. However, with the holiday weekend and states re-opened for business, next week’s EIA measurement report has the potential to show stock declines. Regardless, stock levels and refinery rates are amid the highest in the country, which will contribute to more moderate jumps in gas prices in coming weeks.
Mid-Atlantic and Northeast
As gas prices increase across the country, five Mid-Atlantic and Northeast states carry averages of $2/gallon or more: Pennsylvania ($2.22), New York ($2.18), Washington, D.C., ($2.13), New Jersey ($2.02) and Maryland ($2.01). At $1.75, Virginia has the lowest state average in the region. On the week, the region saw prices increase between two and eight cents.
Regional gasoline stocks have increased for two weeks with levels inching closer to the 72 million bbl mark, per EIA’s latest report. This build is supported by a small increase in regional refinery utilization, which has mostly hovered near the 50% mark the last four weeks. Gas prices are likely to continue increasing in the week ahead.
Colorado (+16 cents), Utah (+15 cents) and Idaho (+12 cents) land on this week’s top 10 list of states with the largest weekly increase. Wyoming (+5 cents) and Montana (+1 cent) saw less significant jumps at the pump since last Monday. With the double-digit increases, Idaho ($2.13) and Utah ($2.17) are the only states in the region with an average greater than $2/gallon.
Regional gasoline stock levels have decreased by 18% since the beginning of April. Despite the consistent draw, gas prices have remained mostly low due to a year-over-year 1.3 million bbl surplus combined with the fact that regional refinery utilization rates have climbed back to 71%. The EIA’s latest stock level measurement shows nearly 7.8 million bbl.
Pump prices in the West Coast region increased last week, pushing state averages up in the region. Arizona (+8 cents), Alaska (+7 cents) and California (+6 cents) saw the largest increases in the region. Hawaii ($3.17) and California ($2.86) remain the most expensive markets in the country. Washington ($2.50), Oregon ($2.43), Nevada ($2.41), Arizona ($2.16) and Alaska ($2.14) follow.
According to EIA’s latest weekly report, total gas stocks in the region increased slightly from 30.8 million bbl to 31 million bbl last week. As gas demand continues to grow in the region, increasing stocks may help to slow price increases, barring any supply challenges.
Oil Market Dynamics
At the end of Friday’s formal trading session, WTI decreased by 67 cents to settle at $33.25 per barrel. Although tension between Hong Kong and China lowered prices on Friday, crude prices generally increased last week amid growing market optimism that domestic crude demand continues to rebound as more states ease stay-at-home restrictions and demand for gasoline has grown. For this week, crude prices may continue to rise if the market believes that the 9.7 million b/d production reduction agreement for May and June 2020 between the Organization of the Petroleum Exporting Countries and other major crude exporters, including Russia, is helping to rebalance the global oil market as demand remains low due to COVID-19.
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.