Average Gas Prices Remain Steady Despite Low Demand
National gas prices have increased fractions of a penny to reach today’s average price for regular unleaded gasoline, which is $2.28 per gallon. Today’s average is the same as one week ago, five cents less compared to one month ago and 56 cents more than the same date last year. Prices continue to remain flat due to lower driving demand and an oversupplied market as a result of increased U.S. production. As refinery maintenance season begins and driving demand increases, we could expect to see some of the gasoline supply in the U.S. soaked up.
- The nation’s top five markets that have seen the largest monthly decreases include West Virginia $2.27 (-11 cents), New Jersey $2.33 (-9 cents), Pennsylvania $2.53 (-9 cents), Illinois $2.29 (-9 cents) and Delaware $2.22 (-9 cents).
- The nation’s top five most expensive markets are Hawaii $3.12, California $2.90, Washington $2.74, Alaska $2.71 and Oregon $2.54.
Gas prices on the West Coast continue to be the highest in the country, with every state in the region landing on the top ten list of most expensive markets: Hawaii ($3.12), California ($2.90), Washington ($2.74), Alaska ($2.71), Oregon ($2.54), and Nevada ($2.53). West Coast refinery turnaround work ramped up this week and as a result, the latest EIA report shows a five percent drop in gasoline production. Regional gasoline inventories remained healthy, however, increasing by 860,000 barrels to 31.125 million barrels, the largest build since early January. On Saturday, PBF Energy’s 155,000-b/d Torrance refinery experienced a fire in an oil processing area. OPIS reports that operations in other parts of the refinery have continued while the impacted area has been shut down.
Drivers in the region have seen a mixed bag of modest increases and decreases over the past week. Issues with the Wahsatch Pipeline, which receives crude oil from locations near Evanston, Wyoming and delivers to refineries in Salt Lake City, Utah, has caused supply problems for some refiners in the area. OPIS reports that Plains All American Pipeline shut down the pipeline last week to address “indications of soil movement” and will keep it closed until they are able to ensure safe operations. Because of the shutdown, OPIS reports that HollyFrontier, Chevron, Silver Eagle and Big West Oil have had to cut production rates at their Salt Lake City refineries and instead depend on truck delivery for crude supplies. Tesoro shut down production at its 63,000-b/d Salt Lake City refinery due to the pipeline issues. Despite problems with the line, state averages in the Utah area have only moved fractions of a penny on the week.
Northeast and Mid-Atlantic
Over the past week, retail averages have remained stable in the Mid-Atlantic and Northeastern region, moving by a penny or less in most areas. Pennsylvania ($2.53) and Washington, D.C. ($2.50) are the only places in the regions with an average price at or above $2.50 per gallon and prices overall remain moderate. New Jersey (-9 cents), Pennsylvania (-9 cents), Delaware (-9 cents), Virginia (-9 cents), Maine (-8 cents) and Washington, D.C. (-7 cents) all landed on the top 15 list of largest monthly declines.
According to the latest EIA report, East Coast gasoline stocks increased by 2.5 million bbl to 76.3 million bbl – a record high for the region. OPIS reports that the increases occurred despite lower imports and lower gasoline production over the past week.
Great Lakes and Central States
The Great Lakes and Central States continue to be the most volatile regions in the country for gas prices with four states landing on the top 10 list of largest weekly changes: Indiana (+5 cents), Michigan (-3 cents), Kentucky (-3 cents) and Ohio (-2 cents).
Several refineries in the Great Lakes and Central regions have cut production rates this week due to planned and unplanned maintenance. Phillips 66’s 330,000-b/d Wood River refinery located in Roxana, Illinois reported a problem with an oil processing unit Tuesday, while OPIS also reports that the company’s 218,747-b/d Ponca City refinery in Oklahoma shut down a fluid catalytic cracking (FCC) unit for unplanned maintenance work. This week’s EIA report shows that gasoline inventories in the Midwest declined for the first time in the past six weeks.
South and Southeast
South and Southeastern states continue to dominate the rankings of the nation’s least expensive markets for gas. South Carolina ($2.04), Alabama ($2.06) and Tennessee ($2.06) are the nation’s cheapest markets for retail gasoline. They are followed in the rankings by regional neighbors, Mississippi ($2.08), Texas ($2.08) and Arkansas ($2.10). Spring turnaround season will likely bring price increases at the pump. OPIS reports that Phillips 66 is planning to begin maintenance in the next 10 days at its 154,000-b/d Borger refinery in the Texas Panhandle.
Oil Market Dynamics
Markets opened Tuesday morning reporting gains after OPEC reiterated its commitment to cut production. OPEC’s most recent Monthly Oil Market Report stated that participating countries successfully implemented 90 percent of the agreed production cuts. Last November, OPEC and non-OPEC countries agreed to cut production by 1.8 million barrels per day for six months starting in 2017 and have since hinted at the possibility of extending those cuts further. The impact the OPEC agreement has on the market will depend on the rate at which the participating countries comply with production cuts. At this time U.S. oil production is up and so are crude oil inventories so retail prices have remained fairly steady. This could all change if OPEC maintains its high level of compliance and refinery maintenance season eats into U.S. supply as driving demand increases. Traders will continue to keep a close eye on OPEC compliance and U.S. supply and production. At the close of Friday’s formal trading session on the NYMEX, WTI was up 4 cents to settle at $53.40 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.