Great Lakes and Central States
Pump prices in the Great Lakes and Central states saw the highest volatility of any region following the drone attacks on Saudi Arabian oil facilities. Motorists in some states are paying nearly 20 cents more to fill-up as compared to last Monday. Kentucky (+19 cents), Michigan (+18 cents), Minnesota (+16 cents) and Iowa (+14 cents) saw the largest weekly increase in the region and land among the top 10 states in the country with the biggest jumps in pump prices. Most states in the region are paying more than they were a month ago, with the exception of South Dakota (-2 cents), Wisconsin (-1 cent) and Michigan (no change).
State averages range between $2.82 – $2.40, with three states touting an average at $2.70 or above: Illinois ($2.82), Michigan ($2.73) and Ohio ($2.70).
Gasoline stocks drew by 539 million bbl for the week ending Sept. 13, in EIA’s latest report. That drops total stocks down by 52.5 million bbl, which is among the highest decreases seen in the region since April. Down 4% to 96%, regional refinery production could slow in coming weeks as refineries plan for fall maintenance. A drop in stocks amid more expensive crude oil prices would likely mean an increase in pump prices for motorists in the region.
South and Southeast
High volatility was also seen among the South and Southeast states on the week. Georgia (+17 cents), New Mexico (+13 cents), Mississippi (+14 cents), South Carolina (+13 cents), Texas (+12 cents), Alabama (+12 cents) and Louisiana (+12 cents) all saw a dime or more increase to the state average.
Still, the majority of gas price averages in the region are $2.45 or cheaper, with Mississippi ($2.32), Louisiana ($2.32), Arkansas ($2.33), Alabama ($2.34), South Carolina ($2.35) and Oklahoma ($2.37) carrying the cheapest in the region and the country at the start of the workweek.
At the end of last week, Tropical Storm/Depression Imelda dumped as much as 45 inches of rain in Texas, but industry reports show refineries are operational. The impact of the storm – including flooding – is not expected to have an effect on gas prices.
With a 2.6 million bbl build, total gasoline stocks for the South and Southeast region sit at 78.6 million bbl in EIA’s latest report. Stocks could see a decrease next week as a result of regional refinery utilization trending down slightly to 92%. Motorists can expect to see volatility at the pump through the end of the month, especially due to the previous week’s spike in crude oil prices.
Mid-Atlantic and Northeast
Four Mid-Atlantic and Northeast states saw gas price averages jump more than a dime on the week: Maryland (+14 cents), Delaware (+14 cents), Tennessee (+12 cents) and North Carolina (+11 cents). However the majority of states in the region saw a minimal impact – with pump jumps of only a few pennies. Vermont (+1 cent) and Connecticut (+2 cents) saw the smallest increases followed by these states which all saw a three cent increase: New Hampshire, Rhode Island, Maine, Massachusetts and New York. Part of the reason such a large number of states saw tempered increases is due to the switchover to winter-blend gasoline last week. This blend is cheaper to produce and sell (compared to summer-blend). Therefore the region was set to experience a decrease at the pump already, which lessened the jumps stemming from the market (crude oil) increases.
Gasoline stocks drew down significantly for a second week, this time by 1.2 million bbl. Total stocks now measure 62.3 million bbl, which is nearly a 3.5 million bbl deficit compared to this time last year. Gas prices in the region may fluctuate in the week ahead as the market continues to adjust to crude oil prices.
Colorado (+10 cents) saw the largest impact in the region at the pump on the week in response to crude oil spikes in the market. Wyoming (+4 cents) saw the second largest increase followed Utah (+3 cents) and a minimal impacts in Montana (+1 cent). Idaho was the only state in the country to see a decrease, albeit a penny, on the week. In the region, state averages range from $2.70 – $2.79.
In addition, Utah (-8 cents), Idaho (-7 cents), Montana (-3 cents) and Wyoming (-2 cents) are among a minority of states whose gas price average is cheaper compared to last month.
With a little more than a 100,000 bbl build, EIA reports regional gasoline stocks to be above 7.5 million bbl. In fact, total stocks sit at a 1.1 million bbl surplus compared to levels mid-September 2018. Despite the healthy levels, Colorado’s gas prices are likely to see some fluctuation while the other states in the region are poised to see some volatility in the short-term.
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI decreased by four cents to settle at $58.09. Oil prices increased sharply last week, following news of attacks on two crude oil facilities in Saudi Arabia on September 14. On Monday, September 16, the first full day of trading after the attack, WTI crude oil prices experienced the largest single day price increase since August 21, 2008 and June 29, 2012, respectively, according to EIA. On Tuesday, Saudi Aramco reported that it was producing 2 million b/d and that its entire output capacity will be fully restored by the end of September. Additionally, Saudi Aramco stated that crude oil exports to customers would continue by drawing on existing inventories and offering additional crude oil production from other fields. Tanker loading estimates from third-party data sources indicate that loadings at two Saudi Arabian export facilities were restored to the pre-attack levels – based on analysis by EIA. These efforts have helped crude prices to stabilize, and they are expected to continue stabilizing this week.
In related news last week, EIA reported that total domestic crude inventories increased by 1.1 million bbl last week. They currently sit at 417.1 million bbl, which is 23 million bbl higher than where they were last year at this time.