Average Gas Prices Begin the Week Under $2 per Gallon

For the first time since the Great Recession, drivers are paying an average price at the pump below $2 per gallon. Monday’s average price of $1.998 per gallon is a savings of two cents per gallon week-over-week and nine cents per gallon month-over-month. Retail averages are down 41 cents per gallon compared to this same date last year, and have fallen for 40 of the past 45 days for a total savings of 22 cents per gallon.

Consumers are expected to benefit from savings at the pump leading into 2016, as supply continues to outpace demand. Domestic crude oil inventories are poised to reach all-time highs, and despite the lower price environment, production has yet to decline significantly. Barring any unexpected disruptions in supply, and if the price of crude oil remains low, retail averages could continue to hover around levels unseen since March 2009.

More than 13,000 stations nationwide are selling gasoline for less than $1.75 per gallon. A total of 29 states are posting averages below $2 per gallon, and pump prices in many parts of the country are well below this benchmark. Missouri ($1.77), Oklahoma ($1.78), South Carolina ($1.78), Tennessee ($1.78) and Kansas ($1.79) are the nation’s least expensive markets for retail gasoline. On the other end of the spectrum, Hawaii ($2.73) leads the market and is joined by regional neighbors California ($2.72), Nevada ($2.49), Washington ($2.43) and Alaska ($2.39) as the top five most expensive markets for gasoline.

Locally, South Jersey drivers are playing an average of $1.82 per gallon of unleaded gas. This represents a 3-cent decrease from last week ($1.85), and is 9 cents less than one month ago ($1.91). Tuesday’s price also represents a savings of 54 cents per gallon compared to this time last year ($2.36).

Retail averages have moved +/-3 cents in the majority of states (42) on the week. Motorists in 42 states and Washington, D.C. have seen prices move lower over this same period, with the largest weekly savings experienced by drivers in the Midwestern states of Ohio (-11 cents), Indiana (-9 cents) and Michigan (-8 cents). Gas prices have increased in eight states versus one week ago, but in a less dramatic fashion. California (+7 cents) is the only state where pump prices moved higher by more than a nickel per gallon week-over-week, and reports of unplanned and continuing refinery maintenance in the state could cause gas prices to rise in the near term until production concerns are resolved.

Motorists nationwide are benefitting from monthly discounts in the price to refuel their vehicles. Averages have fallen by a nickel or more per gallon in 45 states and Washington, D.C. month-over-month, and pump prices are down double digits in 23 states and Washington, D.C. over this same period. The largest monthly savings in the price at the pump are seen in the midcontinent states of North Dakota (-23 cents), Montana (-22 cents), Wyoming (-21 cents) and South Dakota (-21 cents).

Annual discounts persist, but are becoming less pronounced because gas prices also dropped at a substantial rate during the fourth quarter of 2014. For the second consecutive week, Hawaii (-87 cents) and Alaska (-86 cents) are the only two states where drivers are saving more than 75 cents per gallon versus this same date last year. Gas prices are down by more than 50 cents per gallon in 14 states and Washington, D.C. over this same period. The smallest yearly discounts are seen in California (-3 cents) and Nevada (-10 cents), which are the only two states where drivers are not experiencing year-over-year saving of at least 25 cents per gallon.

On the heels of the U.S. Federal Reserve increasing the federal interest rate for the first time in nearly a decade, both Brent and WTI closed out the week at multi-year lows. The global oil market remains oversupplied and a strengthening U.S. dollar is expected to further contribute to the market’s current glut and keep downward pressure on prices.

Oversupply is also expected to characterize the domestic oil market in the near term. The U.S. rig count rebounded in the most recent report, ending a four-week decline, and recent data from the U.S. EIA shows builds in domestic crude and refined products. Also of interest to market watchers, last week Congress passed a budget deal that included lifting the decades-old ban on U.S. crude oil exports; however, the impact of allowing unprocessed crude oil to enter the global oil market remains unknown.

At the close of Friday’s formal trading session on the NYMEX, WTI was down 22 cents and settled at $34.73 per barrel, its lowest price since February 2009.

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.