Gas Prices Hold Steady as Seasonal Decline Temporarily Stalls

Michael Green Contact Tile(WASHINGTON, October 5, 2015) Pump prices remain relatively stable, with today’s national average price for regular unleaded gasoline holding at $2.29 per gallon for the 12th consecutive day. Today’s average price is up by fractions of a penny compared to one week ago, but has moved lower for 43 of the past 49 days, providing drivers with a savings of 12 cents per gallon month-over-month. Significant yearly discounts remain with drivers saving $1.01 per gallon on average, largely attributed to cheaper crude oil and ample gasoline supplies.

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Retail averages have declined 51 cents per gallon since reaching the 2015 peak price of $2.80 per gallon on June 15. The national average tends to move lower during the autumn and winter months due to seasonal declines in both driving and gasoline demand, and pump prices have fallen during the month of October for three years in a row. Despite refineries going offline to conduct scheduled maintenance, there should still be more than enough gasoline to meet demand because people tend to drive less this time of year. Barring any major disruptions in supply, the national average is expected to move lower by the end of the year, and for the first time since 2009, could fall below the $2 per gallon benchmark.

Drivers in every state are paying an average price at the pump below $3 per gallon for the first time since 2009. Averages on the West Coast remain some of the highest in the nation, and California ($2.94) unseated Alaska ($2.91) as the nation’s most expensive market for retail gasoline. Nevada ($2.90), Hawaii ($2.88) and Utah ($2.64) round out the top five most expensive markets for fuel; however, prices have fallen in all of these states week-over-week.  Consumers in New Jersey ($1.96) and South Carolina ($1.96) are paying the nation’s lowest averages at the pump, and a total of four states have retail averages below $2 per gallon.

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Drivers in the majority of states (29 and Washington, D.C.) are paying less at the pump week-over-week, although some volatility remains. Retail averages are down by a nickel or more in eight states over this same period, with the largest discounts experienced by drivers in Alaska (-13 cents), Idaho (-8 cents), Colorado (-7 cents) and Oregon (-7 cents). Weekly comparisons reveal that prices have moved higher in 21 states, although in a slightly less dramatic fashion. Consumers in four states are paying weekly increases of a nickel or more per gallon: Michigan (+9 cents), Ohio (+5 cents), Kansas (+5 cents), and Minnesota (+5 cents).

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With the exception of three states in the Midwest: Ohio (+17 cents), Michigan (+14 cents) and Indiana (+9 cents), motorists nationwide are benefitting from monthly saving in the price of retail gasoline. Averages in the Midwest have been under pressure, due to both planned and unplanned maintenance, at some of the region’s major refineries, and prices should remain relatively volatile as the maintenance continues. Prices have moved lower on the month in 47 states, and drivers in 37 states and Washington, D.C. are experiencing double-digit savings at the pump during that time. Pump prices are discounted by a quarter or more per gallon in seven states, all located west of the Rockies, led by: Alaska (-46 cents), California (-35 cents), Oregon (-34 cents) and Washington (-33 cents).

Drivers nationwide continue to experience significant yearly savings in the price of retail gasoline. The average price at the pump is discounted by more than $1 per gallon in 30 states and Washington D.C. year-over-year, and consumers in Hawaii (-$1.30) and Connecticut (-$1.22) are saving the most per gallon over this same period. Regional neighbors Nevada (-58 cents) and California (-75 cents) are the only states where drivers are not saving more than 75 cents per gallon in comparison to one year ago.

The balance between global supply and demand remains front of mind, and a number of factors are expected to influence global oil prices in the months ahead. Saudi Arabia, the world’s largest exporter of petroleum and the swing member of the Organization of Petroleum Exporting Countries, announced plans to further cut prices to Asia in an effort to protect its market share. Russia is reportedly ready to enter talks with OPEC and other producing countries about possible reductions in output, and the country’s actions in Syria continue to make headlines that influence the geopolitical instability in the region.

Now that Hurricane Joaquin is no longer an imminent threat, market watchers are focusing their attention on domestic supply and demand in light of falling rig counts and the potential impacts of this year’s refinery maintenance season. The number of rigs operating in the U.S. fell by 26 last week, its largest drop since April, which reportedly is a reaction to sustained low oil prices.

WTI opened the Monday trading session posting gains for a second consecutive session, after closing out the Friday’s formal trading session on the NYMEX up 80 cents and settling at $45.54 per barrel.

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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