Gas Prices Drop to Seven-Month Low

Michael Green Contact Tile(WASHINGTON, September 22, 2014) The national average price for regular unleaded gasoline has fallen for 16 consecutive days, reaching today’s average of $3.34 per gallon. Today’s average price is a nickel less than one week ago, a dime less than one month ago and 14 cents less than a year ago. Today’s national average is the lowest in more than seven months.

One week past the start of the seasonal fuel switch in many parts of the country, the national average continues to decline. This is due to decreased demand, cheaper crude oil and the cost savings associated with producing winter-blend fuel. Winter-blend gasoline is less expensive to produce, which can translate to lower prices at the pump. During the transition to this less stringent standard, and barring an unexpected disruption to production or distribution, the national average often posts steady seasonal declines.

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Western states continue to post the highest average gas prices in the nation, led by: Hawaii ($4.23), Alaska ($3.94), Washington ($3.76), Oregon ($3.76) and California ($3.74). For the second week in a row, Hawaii is the only state where drivers are paying an average price above four dollars per gallon. Consumers in every state and Washington, D.C. are experiencing week-over-week savings at the pump, with the average price in 17 states reflecting savings of a nickel or more. Topping the list of falling prices over the past week, the average price at the pump has fallen by a dime or more in Indiana (-13 cents), Michigan (-13 cents), Ohio (-12 cents) and Delaware (-11 cents). One item to watch for West Coast drivers is a reported issue at ExxonMobil’s refinery in Torrance, California. Problems at the refinery were reported last week and a restart of the affected units at the facility was apparently unsuccessful over the weekend. While a spokesperson for ExxonMobil indicated that there has been no impact on production to date, retail prices in areas supplied by this refinery could see prices jump in the coming days if the unit remains offline and output is impacted.

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Drivers in every state are paying less than one month ago and those in nearly half of states (24) are experiencing month-over-month relief at the pump of a dime or more. The largest monthly drops are seen in Ohio (-24 cents), Nevada (-18 cents) and New Mexico (-18 cents). The year-over-year comparisons show widely lower prices across the country, including four states where prices are more than a quarter less. Motorists in a handful of states are paying slightly more to fill their car: Oregon (+6 cents), Washington (+2 cents), Colorado (+1 cent) and Nevada (+.08 cents)

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The latest round of U.S. sanctions on Russia and the recent eruption of violence in Libya leading to the shutdown of oil fields remain of interest to commodities market watchers. Despite these geopolitical tensions, global oil prices continue to test multi-year lows. At the close of today’s formal trading on the NYMEX, West Texas Intermediate (WTI) crude oil settled 89 cents lower at $91.52 per barrel. This marks not just a new 2014 low, but it is the cheapest settlement price dating back to May 1, 2013.

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