Posts Tagged ‘gas price trends’

Low Demand Continues to Pull National Average Lower

September 21st, 2020 by EEdmonds

The latest Energy Information Administration (EIA) report measures demand at 8.48 million b/d, which is a slight uptick from the previous week’s 8.39 million b/d. However, the small increase — likely due to holiday road trips — is still 461,000 b/d lower than last year at this time. Low demand, even as total domestic stocks of gasoline declined to 231.5 million bbl, has helped keep pump prices low.

Today’s national gas price average is $2.18, which is one cent less than last week, the same price as a month ago, but 48 cents cheaper than mid-September last year. On the week, all states saw gas prices decrease or remain stable at the pump. The majority of state averages have pushed cheaper by a penny or two since last Monday. With the nation entering the fall driving season, which typically sees fewer road trips, a continued drop in demand will likely lead to pump prices continuing to decrease.

Additionally, the National Hurricane Center is currently tracking Tropical Storm Beta, which is expected to produce severe flooding and heavy rain in coastal Texas and Louisiana later today. The expected damage to infrastructure will likely hinder ongoing recovery efforts in the region due to other recent storms and hurricanes, which have shuttered total U.S. crude refining capacity by 8.7%. The amount of shuttered oil production in the Gulf of Mexico now stands at 179,237 b/d (just under 10% of total offshore output), according to the federal Bureau of Safety and Environmental Enforcement. Any crude or pump price impacts will likely be contained to the region and not have a national impact.

Quick Stats

  • The nation’s top 10 largest weekly decreases: Delaware (-5 cents), Florida (-4 cents), Maryland (-3 cents), West Virginia (-3 cents), Utah (-3 cents), Colorado (-2 cents), South Carolina (-2 cents), Georgia (-2 cents), New Jersey (-2 cents) and North Carolina (-2 cents).
  • The nation’s top 10 least expensive markets: Mississippi ($1.84), Texas ($1.85), Arkansas ($1.87), Oklahoma ($1.88), Missouri ($1.88), Louisiana ($1.88), South Carolina ($1.90), Alabama ($1.90), Tennessee ($1.93) and Kentucky ($1.96).

Oil Market Dynamics

At the close of Friday’s formal trading session, WTI increased by 14 cents to settle at $41.11. Domestic crude prices increased last week after EIA’s weekly report revealed that total domestic crude inventories decreased by 4.4 million bbl to 496 million bbl. Decreasing stocks could signal that supply and demand are rebalancing, even while production grew by 900,000 b/d last week to 10.9 million b/d. For this week, crude prices could increase again if EIA’s next weekly report shows another decrease in total inventories.

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.

The latest Energy Information Administration (EIA) report measures gasoline demand at 8.3 million b/d, which is the lowest level since mid-June. As demand dropped for a second week, so did gasoline supply levels – down nearly 3 million bbl to 231 million bbl. While consistently decreasing week-over-week, supplies also sit at a 3 million bbl year-over-year surplus.

“Typically lower supply levels translate into higher pump prices. However, even with consistent declines in gasoline stocks, that’s just not the case right now,” said Jeanette Casselano, AAA spokesperson. “Despite the steady supply dip, continued low levels of demand helped push the national gas price cheaper on the week.”

Today’s national gas price average is $2.19, which is three cents less than last week, two cents more than a month ago, but 37 cents cheaper than mid-September last year. On the week, all states saw gas prices decrease or stabilize at the pump. States with the largest declines are paying a nickel to a dime less, but the majority of state averages pushed cheaper by a few pennies since last Monday.

Mid-September is typically a point in the year that ushers in cheaper gas prices due to the switchover at gas stations from summer-blend to winter-blend, which is cheaper to produce. The difference between the two blends comes down to Reid Vapor Pressure (RVP), which is a measure of how easily the fuel evaporates at a given temperature. The higher – or more volatile – the RVP, the more able it is to evaporate at low temperatures. Winter-blend has a higher RVP which allows the fuel to evaporate at low temperatures for the engine to operate properly, especially when the engine is cold. If the RVP is too low on a frigid day, the vehicle will be hard to start and once started, will run rough.

“Motorists will see some cost savings at the pump with the switchover to winter-blend, but the price difference will be less than other years given how cheap prices have been this year already,” added Casselano. “However, hurricanes can always change any forecast for savings.”

The National Hurricane Center is currently tracking a number of tropical storms and depressions. Tropical Storm Sally is expected to produce life-threatening storm surge and hurricane-force winds for the northern Gulf Coast starting later today. Sally has already forced at least one refinery shutdown in Louisiana at Phillips 66. Others are watching the storm to determine any operational decisions (see more details in Oil Market Dynamics section). Any pump price impacts will likely be contained to the region and not have a national impact.

 

Quick Stats

  • The nation’s top 10 largest weekly decreases: Ohio (-10 cents), Kentucky (-7 cents), Indiana (-6 cents), Michigan (-5 cents), North Carolina (-5 cents), South Carolina (-5 cents), Wisconsin (-4 cents), Washington, D.C. (-4 cents), Tennessee (-4 cents) and Illinois (-4 cents).
  • The nation’s top 10 least expensive markets: Mississippi ($1.86), Texas ($1.87), Arkansas ($1.90), Louisiana ($1.90), Missouri ($1.90), Oklahoma ($1.90), Alabama ($1.91), South Carolina ($1.93), Tennessee ($1.94) and Kentucky ($1.96).

Oil Market Dynamics

At the close of Friday’s formal trading session, WTI increased by three cents to settle at $37.33. Although crude prices made a small gain at the end of the week, the price of crude saw a weekly loss of $2.44. Domestic crude prices decreased after EIA’s weekly report revealed that total domestic crude inventories increased by 2 million bbl, increasing total stocks to 500.4 million bbl. Increasing stocks could signal that crude demand is declining, while production increased by 300,000 b/d last week to 10 million b/d. For this week, crude prices could decrease further amid growing demand concerns.

In related news, Tropical Storm Sally has led some offshore platforms in the Gulf Coast to shutter production. Chevron shut its Blind Faith and Petronius platforms and evacuated the workers, while Royal Dutch Shell said it began shutting some of its offshore drilling operations on Sunday. However, according to reports, its offshore production was unchanged, and all personnel remain on production platforms. Additionally, Murphy Oil shut the Delta House platform because it is in the path of the storm. The exact impact of the storm and how long operations remain shuttered will determine if crude supply will be impacted in the region, which could lead to fluctuations in crude prices. Any crude price impacts will likely be contained to the region and not have a national impact.

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.

As Summer Fades Away, Cheaper Gas Prices Here to Stay

September 8th, 2020 by jcasselano

Motorists saw plenty of savings at the pump from Memorial Day through Labor Day. The national gas price average during the unofficial start and stop to summer was $2.15 – the cheapest since 2004. Demand was decimated this summer, which ultimately meant increased supply and cheap gas prices. That trend continues. In its latest report, the Energy Information Administration (EIA) reported that demand dropped from 9.16 million b/d to 8.79 b/d. While gasoline stocks dropped by 4.3 million bbl to 234.9 million bbl, total supply is 5.2 million bbl more than this time last year.

“Summer may be fading into the rearview mirror, but less expensive gas prices are not,” said Jeanette Casselano, AAA spokesperson. “Moving into fall we traditionally see a drop in demand and further savings at the pump. This year that means pump prices could possibly push even lower then we’ve already seen in 2020.”

On the week, the majority of state averages are cheaper by a few cents. A few states in the Mid-West did see more significant price drops ranging from a nickel to a dime. The small handful of states with increases saw a jump of just penny or two, with the exception of Florida (+6 cents).

At $2.21, today’s average is two cents less than last week, one penny more than last month and 35 cents cheaper than a year ago.

Quick Stats

  •  The nation’s top 10 largest weekly decreases: Ohio (-11 cents), Indiana (-9 cents), Kentucky (-6 cents), Michigan (-6 cents), Wisconsin (-5 cents), North Carolina (-4 cents), Illinois (-4 cents), South Carolina (-4 cents), Washington, D.C. (-3 cents) and Oklahoma (-3 cents).
  • The nation’s top 10 least expensive markets: Mississippi ($1.88), Texas ($1.89), Oklahoma ($1.90), Louisiana ($1.91), Arkansas ($1.91), Missouri ($1.92), Alabama ($1.93), South Carolina ($1.96), Tennessee ($1.96) and Kansas ($2.00).

Oil Market Dynamics

At the end of Friday’s formal trading session, WTI decreased by $1.60 to settle at $39.77 per barrel. The price of crude decreased in reaction to a decline in the stock market at the end of last week. The price decreased despite EIA’s weekly report revealing that total domestic crude inventories dropped by 9.4 million bbl, lowering total domestic stocks to 498.4 million bbl. For this week, crude prices could decline further if crude demand concerns arise amid another stock market downturn.

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.

Demand and Pump Prices Jump Across the Country

August 31st, 2020 by EEdmonds

The national gas price average spiked by a nickel on the week to $2.23, but is expected to push cheaper in the week ahead. Pump prices jumped as a result of Hurricane Laura and an increase in demand for one of the highest measurements of the year.

“It’s typical to see increased demand and more expensive gas prices ahead of a storm, especially one that threatens rigs and refineries in the Gulf of Mexico region,” said Jeanette Casselano. “The latest industry reports indicate that facilities in Texas have already begun the restarting process, which means there is no major threat to gasoline stocks and gas prices should push cheaper.”

However, operations in the Lake Charles, La., region are still down and could be for some time. This includes the Lake Charles CITGO (440,000 b/d) and Phillip66 (239,400 b/d) facilities. In the Gulf of Mexico, the Bureau of Safety and Environmental Enforcement (BSEE) reports that 70% of current oil production is still shuttered, which is still significant but better when compared to 84% reported when the storm hit.

The second factor pushing prices more expensive in the last week was the Energy Information Administration (EIA) report that gas demand increased from 8.63 million b/d to 9.16 million b/d. While higher than we’ve seen throughout the summer, this estimated rate is 739,000 b/d lower than the rate last year at this time. Moreover, total domestic gasoline supplies decreased by 4.6 million bbl last week to 239.2 million bbl, but the current level is 7.2 million bbl higher than the level at this time last year.

Today’s national average is a nickel more than last month, but 35 cents cheaper than a year ago. On the week, all but five states saw state gas price averages increase. Of those that saw jumps, nearly 20 state averages are 5 to 15 cents more expensive.

Quick Stats

  •  The nation’s top 10 largest weekly increases: West Virginia (+14 cents), Ohio (+13 cents), Indiana (+10 cents), North Carolina (+9 cents), Pennsylvania (+9 cents), Delaware (+9 cents), Virginia (+9 cents), Minnesota (+8 cents), South Carolina (+8 cents) and Tennessee (+8 cents).
  • The nation’s top 10 least expensive markets: Mississippi ($1.88), Louisiana ($1.89), Texas ($1.90), Arkansas ($1.92), Oklahoma ($1.92), Alabama ($1.93), Missouri ($1.94), Tennessee ($1.99), South Carolina ($2.00) and Kansas ($2.00).

Oil Market Dynamics

At the end of Friday’s formal trading session, WTI decreased by seven cents to settle at $42.97 per barrel. Although crude prices ended the day lower, crude prices increased on the week as Tropical Depression Laura reduced crude production in the Gulf of Mexico. For this week, crude prices may rise again due to a weak U.S. dollar and if prolonged closure of rigs and production platforms tighten domestic crude inventories amid rising demand. However, EIA’s latest weekly report revealed that total domestic crude inventories, currently sitting at 507.8 million bbl, are 80 million bbl higher than where they were during this time in August 2019. The higher level could play a role in stabilizing crude prices.

As of Monday morning, the BSEE Hurricane Response Team reports:

  • Personnel are still evacuated from a total of 137 production platforms, 21.31 percent of the 643 manned platforms in the Gulf of Mexico.
  • Personnel are still evacuated from 2 rigs (non-dynamically positioned), equivalent to 16.67 percent of the 12 rigs of this type currently operating in the Gulf.
  • From operator reports, BSEE estimates that approximately 70% percent of the current oil production in the Gulf of Mexico remains shuttered.

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.

At $2.18, the national gas price average increased by one cent on the week. That is the same price as a month ago and 41 cents cheaper than a year ago.

The minimal change reflects the slow movement at pumps across the country on the week. The vast majority of states (30) saw pump prices fluctuate by a penny, if at all. A few states in the Mid-Atlantic and Mid-West saw more significant jumps, including North Carolina (+7 cents), Kentucky (+6 cents), Virginia (+5 cents) and West Virginia (+5 cents), while Indiana (-5 cents) holds the spot for the largest weekly decrease. The increase in these states could be a result of increased demand, but nationally demand saw a one week decline.

“Gasoline stocks hit their lowest level since the pandemic began and demand dipped on the week, down to 8.6 million b/d,” said Jeanette Casselano, AAA spokesperson. “These decreases typically lead to cheaper pump prices, but this summer we’ve seen atypical gas price trends.”

The Energy Information Administration recorded gasoline stocks at their largest one-week draw since May. Total stocks fell by 4 million bbl down to 243.7 million bbl. Year-over-year, stocks are at a 10 million surplus while demand sits 1.3 million b/d less. U.S refinery utilization rates continue to hover at 80%.

Hurricane Watch

This week the market is watching Tropical Storms Marco and Laura. Marco, whose force is decreasing and is expected to be a tropical depression late on Tuesday, is less of a concern. However, Laura is forecasted to move into the southeastern Gulf of Mexico and become a hurricane by early Tuesday.

According to the U.S. Department of Interior’s Bureau of Safety and Environmental Enforcement, approximately 58 percent, or 1.065 million b/d, of crude production in the Gulf of Mexico has been shuttered ahead of the storms and 114 (18%) platforms evacuated.

While gasoline stocks remain at a healthy level, if platforms and rigs are offline for an extended amount of time, supply could tighten and gas prices could be impacted. AAA will continue to monitor activity and provide related gas price updates.

Quick Stats

  • The nation’s top 10 largest weekly changes: North Carolina (+7 cents), Kentucky (+6 cents), Virginia (+5 cents), West Virginia (+5 cents), Indiana (-5 cents), Illinois (+3 cents), Michigan (+3 cents), Wisconsin (-3 cents), South Dakota (+2 cents) and Iowa (+2 cents).
  • The nation’s top 10 least expensive markets: Mississippi ($1.83), Louisiana ($1.86), Arkansas ($1.87), Alabama ($1.88), Texas ($1.88), Oklahoma ($1.88), Missouri ($1.90), Tennessee ($1.91), South Carolina ($1.92) and Kansas ($1.97).

Oil Market Dynamics

At the end of Friday’s formal trading session, WTI decreased by 48 cents to settle at $42.34 per barrel. Crude prices were supported by growth in the strength of the U.S. dollar. Additionally, domestic crude prices decreased despite EIA’s weekly report revealing that total domestic inventories decreased by 1.6 million bbl last week, lowering total stocks to 512.5 million bbl. For this week, crude prices could increase, depending on the impact of Tropical Storms Laura and Marcos. If crude production continues to decrease and stays offline for an extended period, crude prices could increase as supply tightens.

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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