Today’s national average price for regular unleaded gasoline is $2.35 per gallon, which is three cents more than last week, nine cents more than one month ago, and 23 cents more than at the same time last year. The latest Energy Information Administration (EIA) report shows gasoline demand reached a new weekly record of 9.842 million b/d. The 2017 demand average over the past four-weeks is about one percent ahead of the same four-week period last year. With summer demand running full steam ahead, drivers can expect prices to continue rising.
The nation’s top ten least expensive markets are: South Carolina ($2.09), Mississippi ($2.09), Alabama ($2.10), Arkansas ($2.11), Oklahoma ($2.13), Tennessee ($2.14), Virginia ($2.15), Louisiana ($2.16), Missouri ($2.17) and Texas ($2.17).
The nation’s top ten markets with the largest weekly change include: Missouri $2.17 (+9 cents), Iowa $2.31 (+8 cents), Indiana $2.30 (-8 cents), Nebraska $2.32 (+7 cents), North Dakota $2.31 (+7 cents), Texas $2.17 (+7 cents), South Carolina $2.09 (+7 cents), Alabama $2.10 (+7 cents), Michigan $2.41 (-7 cents) and Ohio $2.25 (-7 cents).
Hawaii ($3.06) remains the nation’s most expensive market for retail gasoline and drivers in the state are paying 10 cents more per gallon than second-place California ($2.96). Regional neighbors, Washington ($2.82), Alaska ($2.80), Oregon ($2.68) and Nevada ($2.63) join in the rankings as the top six most expensive markets. The latest weekly EIA report shows West Coast gasoline inventories dropped 400,000 bbl to 26.7 million bbl, which is below the 28 million bbl mark that most market watchers consider a comfort zone.
California’s boutique reformulated gasoline (RFG) inventories increased 2.6 percent to 4.914 million bbl last week, according to the California Energy Commission (CEC). However, supply levels are still 7 percent lower than this same period last year when the state was experiencing high imports and impressive refinery production. OPIS reports that Oregon refiners are ramping up production in anticipation of an expected tourist spike related to the total solar eclipse later this month. This will be the first total solar eclipse in the continental U.S. since 1979, and the Oregon Department of Energy anticipates it will draw about 1 million visitors to the state.
Increased driving demand pushed prices higher across most of the region, with Wyoming (+ 6 cents) landing on the nation’s list of top 15 weekly price increases. Idaho (+5 cents), Colorado (+5 cents), Montana (+4 cents) and Utah (+4 cents) also saw sizable gains on the week.
Great Lakes and Central States
Drivers in the Great Lakes region were some of the only people in the nation to see drops at the pump this week: Indiana (-8 cents), Michigan (-7 cents) and Ohio (-7 cents). The latest EIA report shows Midwest gasoline inventories dropped 1.2 million bbl to 51.6 million bbl last week. The current inventory levels are in pace with this same period last year and are about 2 million bbl above the five-year average.
South and Southeast
The region remains home to the nation’s least expensive markets for retail gasoline: South Carolina ($2.09), Mississippi ($2.09), Alabama ($2.10), Arkansas ($2.11), Oklahoma ($2.13), Tennessee ($2.14), Louisiana ($2.16) and Texas ($2.17). Last week’s EIA report showed that gasoline inventories for states in this region dropped by more than 1 million bbl, resting at 80.4 million bbl. The report also shows regional refineries running at 97 percent, which means their capacity to produce refined products like gasoline, is at a very high level. The strong output capacity is contributing to inventories in the region being around 5.25 million bbl ahead of the 5-year average, as noted from data in EIA’s weekly report.
Mid-Atlantic and Northeast
Pump prices in the Mid-Atlantic and Northeast regions moved higher on the week, with Washington D.C. ($2.55), Pennsylvania ($2.52), Connecticut ($2.46), New York ($2.45) and New Jersey ($2.37) all landing on the top 15 list of most expensive markets, while Virginia ($2.15) and North Carolina ($2.16) landed on the list of top 15 least expensive markets. With most of the country seeing declines in gasoline inventories, this region saw gasoline inventories increase by approximately 400,000 bbl, according to EIA’s latest reports. With the continued record high output rates for refined products, refiners are able to cheaply produce large amounts of gasoline and store it in the regions. However, as gas prices increase and demand stays strong, storage levels are likely to fall.
Oil market dynamics
After briefly pushing above the $50 benchmark last week and then dropping down, the price per barrel for West Texas Intermediate (WTI) once again appears poised to push above $50 after increasing 55 cents to settle at $49.58 on Friday. With market observers watching crude storage levels to see if they decline, this week’s EIA report was welcomed news since it showed that they had reached their lowest point this year at 481.9 million bbl. However, last week’s excitement was tempered by total crude storage remaining at approximately 70 million bbl ahead of the five-year average.
EIA’s report also showed an increase in domestic crude oil output to 9.43 million b/d last week, making it clear that the glut of crude will not disappear easily. On the other side, according to Baker Hughes, Inc., the U.S. lost one oil rig last week, bringing down the total number of active rigs to 765. The modest decline may be an indicator of investment in offshore drilling leveling out for the year.
As OPEC and non-OPEC countries convene today and tomorrow in Abu Dhabi to discuss compliance with the production reduction agreement in place through the end of March 2018, more time or dramatic actions from major producers may be needed to hasten efforts to rebalance the global oil market. In the meantime, gains in the market are likely to be moderate as drivers see prices continue to increase at the pump.
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.