Gas prices jumped four cents on the week landing today’s national average at $2.53. According to the Energy Information Administration (EIA), gasoline demand increased 164,000 bbl on the week to register at 8.8 million. The demand measurement is the highest demand for the first EIA report of January since 2011. The demand increase is a contributing factor to this week’s higher pump prices.
“The EIA’s gasoline demand measurement is higher than any week in January last year,” said Jeanette Casselano, AAA spokesperson. “If demand continues to climb, motorists are likely to see pump prices increase too, paving the way for even more expensive fill-ups. This month’s average is already 19-cents more than last January.”
Motorists in the Great Lakes and Central states are seeing the largest increase in gas prices on the week. Only two states, Alaska (-2 cents) and Rhode Island (-1 cent), in the country carry pump prices that are less than last week’s price.
- The largest weekly changes in the top ten markets are: Kansas (+9 cents), Kentucky (+9 cents), Indiana (+9 cents), Iowa (+9 cents), Michigan (+7 cents), Minnesota (+7 cents), Oklahoma (+7 cents), Missouri (+7 cents), Georgia (+7 cents) and Nebraska (+6 cents).
- The nation’s top ten least expensive markets are: Texas ($2.28), Alabama ($2.28), Mississippi ($2.29), Missouri ($2.30), Arkansas ($2.30), South Carolina ($2.30), Oklahoma ($2.32), Arizona ($2.32), Louisiana ($2.33) and Virginia ($2.34).
Pump prices in the West Coast region are among the highest in the nation. Six of the most expensive markets in the country are found in this region: Hawaii ($3.30), California ($3.18), Alaska ($3.08), Washington ($2.93), Oregon ($2.82) and Nevada ($2.68). On the week, Oregon (+2 cents) saw the region’s largest increase and Alaska (-2 cents) saw the largest decrease.
The EIA’s first weekly petroleum status report for 2018 found that gasoline inventories measure near a 2-year high at 33.4 million bbl. The level is well above the 28 million bbl threshold that many market observers consider “comfortable” for the region. Additionally, the region’s refineries produced 1.48 million b/d of gasoline according to the EIA’s latest report. However, as winter and planned maintenance ahead of spring moves forward, gasoline production levels may decline in the coming weeks.
Great Lakes and Central
Eight Great Lakes and Central states land on this week’s top 10 states with the biggest changes list: Kansas (+9 cents), Kentucky (+9 cents), Indiana (+9 cents), Iowa (+9 cents), Michigan (+7 cents), Minnesota (+7 cents), Missouri (+7 cents) and Nebraska (+6 cents). All states in the region are paying more compared to last week. Gas prices range from as low as $2.30 in Missouri to as high as $2.69 in Michigan.
Gasoline inventory built in the region for the third week in a row adding 2.2 million bbl. That is the second highest build in the country according to the EIA. In total, Great Lakes and Central states inventories measure at 53 million bbl.
South and Southeast
Gas prices continue to increase for motorists across the South and Southeast. Compared to one month ago, gas prices are as much as 8 to 13 cents more expensive: Georgia (+13 cents), Oklahoma (+12 cents), South Carolina (+12 cents), Florida (+11 cents), Mississippi (+10 cents), Arkansas (+10 cents), Alabama (+10 cents), Louisiana (+9 cents) and Texas (+9 cents). New Mexico is the only state in the region with less expensive gas prices (-6 cents) on the month.
Despite the month-over-month increases, the South and Southeast continue to carry the cheapest gas in the country. This week, Texas ($2.28) leads the region and the country with the least expensive gas price average.
For a second week, gasoline inventories decreased in the region, though this week by a high 2.36 million bbl. Measuring at 81.7 million bbl, inventory levels are 1 to 2 million below January levels the past two years.
Mid-Atlantic and Northeast
In the region, Tennessee (+6 cents) saw the largest increase at the pump on the week. Motorists are paying more in every state in the region except for Rhode Island ($2.55) where prices are one cent cheaper. With the increases, Pennsylvania ($2.80) and Washington, D.C. ($2.75) sell the most expensive gas in the region and among the most expensive in the country. At $2.55, Massachusetts and Rhode Island sell the least expensive gasoline.
The Mid-Atlantic and Northeast region had the largest build of all regions in gasoline inventories on the week. According to the EIA, the region added 3.2 million bbl, totaling inventories at 61.4 million bbl. Despite the build, inventories sit at nearly 6 million bbl below levels this time last year, yet 1.7 million bbl more than the start of 2016.
Gas prices increased as much as three cents in the region on the week: Utah (+3 cents), Idaho (+3 cents), Colorado (+1 cent) and Wyoming (+1 cent). Montana’s average remained stable at $2.57. On average, gas prices in the Rockies are $2.50, with all states paying at least 17-cents more than at the same time last year.
Building by 502,000 bbl, gasoline inventories sit at 7.8 million bbl – a healthy inventory level for the region.
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI increased 50 cents to settle at $64.30. Oil prices edged higher last week following the release of EIA’s report for the first week of 2018, which revealed that domestic crude oil production dropped by 290,000 b/d. The decline is the largest U.S. production drop since the highly active hurricane season ended in mid-October last year. Moreover, crude inventories around the country dropped by 4.9-million bbl.
Some market observers are encouraged that oil prices will continue to climb as production slows and inventories grow tighter. However, the drop in production may be short-lived. Baker Hughes, Inc. reported that last week, the number of active oil rigs in the U.S. grew by 10, bringing the total number of rigs to 752. The oil produced by these rigs may help the U.S. reach a new crude production level of 10 million b/d later this year, as speculated by many market observers.
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.