Gas Prices Drop for Nine Straight Days

Michael Green Contact Tile(WASHINGTON, March 16, 2015) After rising for 40 days in a row, the national average price for regular unleaded gasoline has now fallen for nine straight days to today’s average of $2.42 per gallon. Today’s national average is three cents less than one week ago, but 18 cents more than one month ago. Compared to this same date last year, consumers are saving an average of $1.09 per gallon at the pump.

Gas prices may continue to drop in the near future due to a steep decline in the cost of crude oil. Crude oil prices declined by more than 10 percent last week due to abundant supplies, a stronger U.S. dollar, and the possibility of even more oil entering the market soon. Every $10 per barrel decline in the cost of crude oil can send gas prices down by nearly 25 cents per gallon.


The national average tends to moves higher this time of year because refineries conduct planned maintenance, which can limit fuel production. Refineries are also beginning to transition to summer-blend fuel in advance of the May 1 deadline. As part of this process, refineries draw down current inventories of winter-blend fuel, which can further constrain supplies. However, gas prices should remain relatively cheap because crude oil costs are much lower than recent years and U.S. inventories have risen for nine straight weeks, which should keep downward pressure on retail gasoline markets.


The West Coast is still recovering from localized refinery issues and remains the nation’s most expensive region for retail gasoline. Motorists in California ($3.37) continue to pay the highest pump prices in the nation, and the retail price is likely to remain relatively high due to lingering limited supply. California is followed by Hawaii ($3.14), Alaska ($2.91), Nevada ($2.87) and Oregon ($2.86) as the nation’s the top five most expensive markets. On the other end of the spectrum, drivers in South Carolina ($2.14), Indiana ($2.19) and Tennessee ($2.19) are paying the least per gallon to refuel their vehicles.

Weekly price comparisons in most states reflect relatively stable prices, with the average price moving by +/- 2 cents in 36 states. However, a handful of states have seen prices move more dramatically. Prices in Idaho (+15 cents) and Utah (+14 cents) have moved sharply higher, largely due to regional refinery issues, while one-week price drops in Ohio (-12 cents) and Indiana (-11 cents) headline the 42 states where prices have fallen.


Month-over-month comparisons continue to show that the majority of drivers (45 states and Washington, D.C.) are paying more at the pump. The average price for retail gasoline has climbed by more than a dime per gallon in 42 states and Washington, D.C., and motorists in four states have seen prices increase by 50 cents or more over this same period: California (+60 cents), Oregon (+52 cents), Washington (+51 cents) and Idaho (+51 cents). A handful of Midwest states are bucking this trend, as prices are down in Indiana (-12 cents), Ohio (-9 cents), Kentucky (-6 cents), Michigan (-4 cents) and Illinois (-2 cents) versus one month ago.

Despite fluctuations in the retail gasoline market, consumers are still experiencing significant savings year-over-year. The average price is discounted in every state and Washington, D.C. compared to this same date last year. Drivers in seven states are saving $1.25 or more per gallon, led by Indiana (-$1.50), Michigan (-$1.47) and Ohio (-$1.45).

The global oil market remains oversupplied, and relatively high U.S. production levels continue to support bearish market sentiment. This trend is likely to continue as warmer weather in the Bakken region of the United States allows for increased output after production levels in the region slipped in January.

The possibility of geopolitical events in major production regions is likely keep the market relatively volatile in the near term. Speculation is beginning about the agenda for OPEC’s first scheduled meeting of the year, and whether the cartel will intervene to cut oil production in order to pressure prices higher in the global market. Without signals of a decision being made in advance of this meeting, the market will be left to self-regulate in search of bottom.

The divergence between Brent and West Texas Intermediate, the two most cited oil benchmarks, remains approximately $10 per barrel, just shy of February’s 14-month high of $13 per barrel. At the close of Friday’s formal trading on the NYMEX, WTI fell $2.21 and settled at $44.84 per barrel.

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