WASHINGTON, D.C. (March 16, 2023)—Despite the sour economic news roiling the stock and oil markets, the national average for a gallon of regular gasoline had a calm week, remaining at $3.46. Meanwhile, the global oil price plunged into the low to mid $60 per barrel, a level not seen since August 2021.
“Given that the cost of oil accounts for 55% of what we pay for gas, it’s fair to wonder how soon prices will drop at the pump,” said Andrew Gross, AAA spokesperson, “But gas stations paid for that fuel in their underground tanks weeks ago, when oil was nearly $15 more a barrel. So it will take time for any savings due to cheaper oil to be seen at the pump. And that is assuming the oil price does not rise again.”
According to new data from the Energy Information Administration (EIA), gas demand increased slightly from 8.56 to 8.59 million b/d last week. Meanwhile, total domestic gasoline stocks decreased by 2.1 million bbl to 236 million bbl last week. Increasing demand amid tighter supply would typically push pump prices higher; however, lower oil prices have countered this effect. If crude oil prices keep falling, drivers could see pump prices decline.
Today’s national average of $3.46 is four cents more than a month ago but 84 cents less than a year ago.
Since last Thursday, these 10 states have seen the largest decreases in their averages: Colorado (−10 cents), Michigan (−7 cents), Ohio (−6 cents), Oklahoma (−6 cents), Wisconsin (−4 cents), California (−4 cents), Nevada (−4 cents), Idaho (−3 cents), Nebraska (−3 cents) and Oregon (−2 cents).
The nation’s top 10 least expensive markets: Mississippi ($3.00), Oklahoma ($3.02), Missouri ($3.04), Texas ($3.05), Arkansas ($3.06), Kansas ($3.07), Louisiana ($3.08), Alabama ($3.11), Tennessee ($3.13) and South Carolina ($3.15).
Oil Market Dynamics
At the close of Wednesday’s formal trading session, WTI decreased by $3.72 to settle at $67.61. Crude prices have dropped this week amid rising market concerns about the health of the global banking sector. Low confidence in the sector and fears that regulatory responses could tip the economy into a recession could push crude demand down alongside prices. Additionally, the EIA reported that total domestic commercial crude inventories increased by 1.6 million bbl to 480.1 million bbl last week.
Drivers can find current gas prices along their route using the AAA TripTik Travel planner.