After a one-day dalliance with a rising price, the national average for a gallon of gas resumed its steady retreat, shedding four cents since last week to $3.20. The main reason is a weaker cost for oil, which is struggling to stay above $70 per barrel. The falling price comes just a week after OPEC+ announced voluntary production cuts of about 2 million barrels daily. But instead of viewing it as coal in the stocking, the oil market response has thus far been a resounding “meh.”
“Historically, crude oil tends to drop nearly 30 percent from late September into early winter with gasoline prices trailing the play,” said Andrew Gross, AAA spokesperson. “More than half of all US fuel locations have gasoline below $3 per gallon. By the end of the year, the national average may dip that low as well.”
According to new data from the Energy Information Administration (EIA), gas demand increased slightly from 8.21 to 8.47 million b/d last week. Meanwhile, total domestic gasoline stocks increased significantly by 5.4 million bbl to 223.6 million bbl. Despite low gas demand, supply growth has helped push pump prices lower. If oil prices remain low, drivers can expect pump prices to do the same during the holiday season.
Today’s national average of $3.20 is 20 cents less than a month ago and 15 cents less than a year ago.
Quick Stats
- Since last Thursday, these 10 states have seen the largest decreases in their averages: Colorado (−12 cents), Utah (−11 cents), Idaho (−11 cents), California (−10 cents), Florida (−10 cents), Indiana (−10 cents), New Mexico (−9 cents), Arizona (−8 cents), Kentucky (−8 cents) and Nevada (−8 cents).
- The nation’s top 10 least expensive markets: Texas ($2.68), Mississippi ($2.72), Oklahoma ($2.74), Missouri ($2.75), Louisiana ($2.75), Arkansas ($2.78), Kansas ($2.83), Alabama ($2.84), Tennessee ($2.85) and Iowa ($2.87).
Oil Market Dynamics
At the close of Wednesday’s formal trading session, WTI decreased by $2.94 to settle at $69.38. Oil prices dropped yesterday due to market concerns that lackluster demand could continue to push supply up while prices slide through the remainder of 2023. Additionally, the EIA reported that total domestic commercial crude inventories decreased by 4.7 million bbl to 445 million bbl last week.
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