Nearly 20 percent of states are currently enjoying prices below $2.00 per gallon. Nationally, retail averages have dropped 83 of the past 90 days. The national average for regular unleaded gasoline currently sits at $2.30 per gallon, which is six cents less than one week ago, 24 cents less than one month ago and 16 cents less than at the same time last year.
Heading into 2019, gasoline demand is expected to dwindle during the month of January, an expected change following the busy holiday travel season. At the same time, OPEC will begin production cuts on January 1, with hopes that the shift in global supply will push oil prices higher. The effectiveness of the cuts will likely not be known until later in the first quarter.
“All eyes are on OPEC to kick off the year,” said Jeanette Casselano, AAA spokesperson. “Many are waiting to see if they stick to their promise to cut crude production by 1.2-million b/d and if the proposed cuts will be enough to restore balance to the market.”
Over the past few years, OPEC and partnering countries have demonstrated a strong resolve to comply with proposed cuts in production. It is likely that the cartel will reconvene in April, and if there is a need to further balance global supply and demand, OPEC will likely tweak current production numbers at that meeting.
The nation’s top 10 largest weekly decreases are: Ohio (-15 cents), Indiana (-15 cents), South Dakota (-12 cents), Michigan (-12 cents), Montana (-11 cents), Kentucky (-10 cents), Illinois (-10 cents), Wisconsin (-10 cents), Wyoming (-9 cents) and Idaho (-9 cents).
The nation’s top 10least expensive markets are: Missouri ($1.87), Oklahoma ($1.95), Arkansas ($1.97), South Carolina ($1.97), Texas ($1.97), Alabama ($1.97), Mississippi ($1.97), Louisiana ($1.98), Kansas ($1.99) and Iowa ($2.01).
Great Lakes and Central
Prices have dropped significantly across the region, with Ohio (-15 cents), Indiana (-15 cents), South Dakota (-12 cents) and Michigan (-12 cents) topping the list of largest weekly declines. Missouri ($1.87) and Oklahoma ($1.95) have both dropped below $2 per gallon. Drivers in Iowa ($2.01) and Ohio ($2.01) will likely see prices below $2 to start the New Year.
According to the latest Energy Information Administration (EIA) report, gasoline inventories in the Midwest region jumped by 1.7 million bbl to 51.4 million bbl for the week ending on December 14. Total regional inventories are now 3.6 million bbl higher than this same time last year.
South and Southeast
Most drivers in the South and Southeast regions continue to enjoy some of the cheapest prices in the nation due to their proximity to major Gulf Coast refineries and having some of the lowest state gasoline taxes in the country. Currently, six states in the region are seeing average prices below $2 per gallon: South Carolina ($1.97), Alabama ($1.97), Arkansas ($1.97), Texas ($1.97), Mississippi ($1.97) and Louisiana ($1.98).
Mid-Atlantic and Northeast
The Northeast is one of the most expensive regions in the country this week. Connecticut ($2.65), New York ($2.64), Washington D.C. ($2.62), Massachusetts ($2.56) and Vermont ($2.56) all land on the list of top-15 most expensive markets in the country.
Despite recent declines, prices in Vermont, New York and Connecticut are still at least one-cent higher year-over-year.
Gas prices for drivers in the Rocky Mountain region have dropped steadily over the past week. Increased refinery runs helped boost regional supply. With no export outlets, OPIS reports that the region is most susceptible to “clearance sales” on gasoline when inventories inflate. Currently, three states in the region are on the top-10 list of largest declines for the week: Montana (-11 cents), Wyoming (-9 cents) and Idaho (-9 cents).
Motorists in the West Coast region continue to pay the highest pump prices in the nation, with all of the region’s states landing on the nation’s top 10 most expensive list. Hawaii ($3.41) is the nation’s most expensive market, followed by California ($3.38), Washington ($3.13), Alaska ($3.07), Nevada ($2.96), Oregon ($2.98), and Arizona ($2.68). While expensive, prices are decreasing, with all state averages moving lower on the week: Hawaii (-6 cents) saw the largest drops.
The EIA’s weekly petroleum status report, for the week ending on December 14 showed West Coast gasoline stocks decreased by approximately 700,000 bbl to 27.6 million bbl. Stocks are approximately 3.4 million bbl lower than at this time last year, which could cause prices to spike if there is a supply challenge in the region this week.
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI decreased 29 cents to settle at $45.59. Oil prices mostly fell last week, reaching their lowest since the third quarter of 2017, as market observers have concerns that the global crude market is oversupplied. Moreover, according to the latest weekly petroleum status report from the EIA, total domestic crude inventories took a slight step back last week. At 441.5 million bbl, crude inventories fell by 500,000 bbl. When compared to last year at this time, combined inventories across the country are still 5 million bbl higher this year. To reduce the oversupply of crude globally, earlier this month OPEC and non-OPEC producers, including Russia, announced that beginning in 2019, they will reduce crude production by 1.2 million b/d (for an initial six month period). This move could drive crude oil prices up, and in turn drive gas prices higher in the New Year.
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.