Falling averages are often the trend at this time of year due to a decline in driving and the switchover to winter-blend gasoline. Unlike previous years, refinery maintenance season this autumn is expected to be heavier than usual due to refineries operating at higher than normal rates for longer periods over the summer months. As the refinery maintenance season continues to ramp-up, gas price declines could slow and temporarily change direction. However, the market’s current oversupply is expected to keep prices relatively low, and barring any unexpected price spikes, consumers should continue to experience significant yearly savings at the pump approaching the end of the year.
Motorists in a total of five states are paying averages below the $2 per gallon benchmark. Drivers in South Carolina ($1.96) are paying the nation’s lowest averages at the pump, followed by: Mississippi ($1.96), New Jersey ($1.98), Alabama ($1.98) and Tennessee ($1.99). Alaska ($3.04) leads the market with highest price in the nation, and is the only state with an average price above $3 per gallon. Regional neighbors California ($2.99), Nevada ($2.94), Hawaii ($2.90) and Utah ($2.70) are the nation’s top five most expensive markets for gasoline.
Weekly price comparisons reveal a bit of volatility, with state averages moving by double-digit increments at both ends of the spectrum. Despite this fluctuation, overall savings persist and motorists in the majority of states (30 and Washington, D.C.) are experiencing weekly savings in the price to refuel their vehicles. Pump prices are discounted by a nickel or more per gallon in a total of 10 states, and the largest weekly savings in the price at the pump are seen in Alaska (-10 cents), Idaho (-8 cents) and Colorado (-8 cents). On the other end of the spectrum, averages have climbed higher in 20 states over this same period. The largest weekly increases in price are seen in the Midwestern states of Indiana (+13 cents), Kentucky (+9 cents) and Michigan (+9 cents).
Consumers nationwide are experiencing monthly savings at the pump, and prices in the majority of states (46 and Washington, D.C.) have fallen by double-digit increments over this same period. Drivers in a total of 10 states are benefitting from monthly savings of a quarter or more per gallon, with the largest savings at the pump seen in the West Coast states of Alaska (-38 cents), California (-37 cents), Oregon (-35 cents) and Washington (-34 cents).
Yearly price comparisons continue to reflect significant discounts in the price of retail gasoline. Averages are down year-over-year in every state and Washington D.C., and consumers in 33 states and Washington, D.C., are saving a $1.00 or more per gallon. Hawaii ($1.31), Connecticut ($1.23) and Vermont ($1.22) are posting the largest savings over this same period, and prices in 48 states and Washington, D.C., are discounted by at least 75 cents per gallon.
Uncertainty about global oil demand is reportedly impacting the price of crude, and both major benchmarks—Brent and West Texas Intermediate—opened Monday’s trading session with losses. China, which accounts for approximately 12 percent of the world’s total oil demand and frequently ranks as a top importer, announced plans to implement a national cap-and-trade program for carbon emissions. Although the impacts of the program on the crude oil market are unknown, a reduction in the country’s demand could further exacerbate the market’s current oversupply and put a ceiling on global oil prices.
The domestic oil market also remains in question, and the balance between supply and demand is expected to heavily influence North American oil prices. Domestic oil rig counts have reportedly fallen for the fourth week in a row, and according to the U.S. Energy Information Administration, sustained low oil prices could mark the beginning of a reduction in investment in exploration and production activities.
WTI closed out Friday’s formal trading session on the NYMEX up 79 cents, settling at $45.70 per barrel, but was last reported to be nearly a dollar lower this morning in early trading.