Despite the persistence of some regional refinery issues, average U.S. gas prices are falling at the fastest rates since December. The BP refinery outage in Whiting, Indiana, which sent prices markedly higher in the Midwest several weeks back, has resumed production. Prices continue to fall week-over-week in the previously impacted states of Michigan, Ohio, Indiana and Illinois. The East Coast is currently facing its own production challenges with reports that the Phillips 66 Bayway refinery in New Jersey is operating at reduced rates. This is in addition to PBF Energy’s Delaware City refinery shutting down its fluid catalytic cracking unit last week due to a fire. These East Coast issues have yet to significantly impact prices in the region as supply continues to outpace demand. Barring any major supply disruptions consumers remain poised to pay the lowest national average for the holiday weekend in 11 years.
The Pacific Northwest remains the nation’s most expensive region for retail gasoline, and all of the states represented in the nation’s top ten most expensive are located west of the Rockies. Alaska ($3.40) is the nation’s most expensive market for retail gasoline, unseating California ($3.35) after seven straight weeks as the market leader following tightening supply within the state. Nevada ($3.13), Hawaii ($3.10) and Washington ($2.95) round out the top five most expensive markets. On the other end of the spectrum, motorists in South Carolina ($2.02) are paying the lowest price at the pump in the nation.
On the whole, motorists nationwide are paying less per gallon at the pump. The average price is down week-over-week in 49 states and Washington, D.C., with the majority of states (45) posting savings of a nickel or more per gallon over this same period. Consumers in 16 states are benefiting from double-digit savings in the price of retail gasoline, led by Michigan (-31 cents), Ohio (-30 cents), Indiana (-29 cents) and Illinois (-26 cents). Utah (+1 cent) is the only state that bucks this trend of weekly savings.
The majority of drivers (47 states and Washington, D.C.) are also experiencing monthly savings at the pump. Averages are down a dime or more per gallon in 39 states and Washington, D.C., and the price is discounted by a quarter or more per gallon in nine states month-over-month. The largest savings over this same period are in California (-41 cents), New Jersey (-28 cents), Rhode Island (-27 cents) and Maine (-26 cents). Prices moved higher versus one month ago in Indiana (+12 cents), Illinois (+12 cents) and Ohio (+2 cents).
Significant savings continue to be seen in yearly price comparisons due to the relatively low cost of crude oil, which set new multi-year lows last week before rallying to end the week. The price of gas is down year-over-year in every state and Washington D.C., and pump prices are discounted by $1 per gallon or more in 25 states. The largest yearly discounts are in Hawaii (-$1.18), Vermont (-$1.15) and South Carolina (-$1.15).
Market fundamentals remain bearish, even as oil prices staged a rally late last week that pushed prices a bit higher compared to early-week trading sessions where both Brent and WTI exceeded multi-year lows. China’s economic health and the potential for Iranian oil to return to markets remain front of mind, and are expected to keep downward pressure on global crude oil prices. Oil prices were moving lower again at the start of formal trading today, further validating the sentiment that oversupply will continue to characterize the market in the near term.
At the close of Friday’s formal trading on the NYMEX, WTI settled at $45.22 per barrel recovering from six and a half year low of $38.25 per barrel reached last Monday.