Gas Price Slide Reaches 19 Days

Michael Green Contact Tile(WASHINGTON, August 3, 2015) The resolution of localized refinery issues and lower prices for crude oil has kept downward pressure on the national average price at the pump, which has fallen for 19 consecutive days. Today’s national average price for regular unleaded gasoline is $2.65 per gallon, down six cents versus one week and 12 cents versus one month ago. Drivers are paying the lowest averages for this date since 2009, and today’s national average represents a savings of 85 cents per gallon compared to this same date last year. The national average is now 15 cents per gallon lower than the 2015 peak price of $2.80 on June 15.

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The national average has steadily dropped, yet volatility continues to characterize several regional markets due to unexpected drawdowns in supply. While some states may not experience significant price drops as a result of regional supply and distribution issues, the national average is expected to keep moving lower leading up to the Labor Day holiday, barring any unexpected spikes in the price of global crude oil or unexpected disruptions to domestic production.

Pump prices west of the Rockies remain the most expensive in the nation and all seven states with averages above $3 per gallon are located in this region. Drivers in California ($3.74) are paying the nation’s highest averages for retail gasoline and are followed by Alaska ($3.48), Hawaii ($3.28), Nevada ($3.24) and Washington ($3.17) as top five most expensive markets for motorists. Although prices on the West Coast appear to be easing, retail averages remain volatile based on shifts in supply and demand. Alabama ($2.266) is the nation’s least expensive market, unseating South Carolina ($2.269) by fractions of a penny.

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With the exception of Indiana (+2 cents) and Alaska (+1 cents), pump prices are down in every state and Washington, D.C. over the past week. The largest discounts in price are seen in Ohio (-14 cents), Kansas (-11 cents) and Minnesota (-11 cents), while consumers in 24 states and Washington, D.C. are enjoying weekly saving of a nickel or more per gallon.

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The majority of drivers (39 states and Washington, D.C.) are paying less to refuel their vehicles month-over-month. Averages are down by a dime or more per gallon in 30 states and Washington, D.C., with the most dramatic savings in the Midwest: Ohio (-41 cents), Michigan (-38 cents), Indiana (-37 cents) and Illinois (-31 cents). Production issues had driven prices higher in this region over the past several months, and following their resolution, prices have fallen as supply and demand have returned to balance. On the other end of the spectrum, prices in 11 states have moved higher over this same period due to the lingering impact of refinery issues. Motorists in California (+30 cents) and Colorado (+13 cents) are paying the largest premiums compared to one month ago.

The average price for retail gasoline remains significantly discounted versus this same date last year. Motorists nationwide are paying less to refuel their vehicles, and prices are down by 75 cents per gallon or more in the majority of states (41 and Washington, D.C.). Year-over-year prices are down by $1 or more in five states, with the largest savings at the pump being enjoyed by drivers in Ohio (-$1.17) and Hawaii (-$1.06).

The global price of crude oil continues to sink on expectations that the market will remain oversupplied in the near term. Recent reports suggest that Chinese manufacturing has fallen to its lowest level in two years, which may signal that this important driver of global consumption is poised for less than anticipated economic growth. Weaker growth means lower than projected oil demand, which could further increase the glut in global petroleum supplies. Reports that Iran is planning to increase oil output when sanctions are lifted, combined with the U.S. increasing its rig count, has also contributed to major crude benchmarks (Brent and West Texas Intermediate) opening this week’s trading session at multi-month lows.

At the close of Friday’s formal trading on the NYMEX, WTI closed down $1.40 at $47.12 per barrel – a product of late selling on the heels of news that U.S. oil rig counts were up for the second week in a row. The market’s fundamentals are characterized as weak, and last week’s lows are expected to be tested over the next seven days.

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.

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