Aug 2, 2016 | Fuel
By Avery Ash Director, Federal Relations Monday, August 1, 2016
National pump prices have fallen 50 of the past 51 days for a total of 25 cents per gallon. The national average price for regular unleaded gasoline has declined to $2.13 per gallon, which is the lowest level in the past 100 days and the lowest price for this date since 2004. Today’s price is three cents less than one week ago, 15 cents less than one month ago and 52 cents less than the same date last year.
Gas prices across most of the country continue to slide during the peak road-trip season due to abundant supplies. Gas prices dropped in 45 states and Washington, D.C. over the past week, though several states did post increases (Indiana +9 cents, Utah +3 cents, Ohio +3 cents, Missouri +1 cent, and Idaho up fractions of a penny). This sort of dramatic price change will come as no surprise to Midwestern drivers as pump prices regularly move significantly from week to week. Despite the recent uptick in several states, prices in every state are lower than both one month ago and one year ago.
As of yesterday, more than 40 percent of gas stations nationwide were selling gasoline for $2.00 per gallon or less, compared to just a handful on this same date last year. Fewer than one percent of stations nationwide are selling gasoline for more than $3.00 per gallon, compared to 13 percent of stations one year ago.
Locally, South Jersey motorists are paying an average of $1.86 per gallon of unleaded gas. This represents a decrease of 3 cents per gallon since last week ($1.89) and 17 cents in the past month ($2.03). Today price is 54 cents per gallon less than this time last year.
With gasoline supplies high and oil prices low, pump prices are likely to remain relatively cheap through the remainder of the summer and into the fall. While a record number of American motorists have hit the road for summer travel, sharply lower gas prices have not triggered the sharply higher gasoline demand that many analysts had anticipated. This was evident in last week’s Energy Information Administration report, which revised the mark for U.S. gasoline demand in May lower by 213,000 barrels per day to 9.436 million. While lower than first reported, this demand number was still the highest total on record for the month of May.
Despite the lowest seasonal prices in more than a decade, unexpected events could trigger higher prices. Rising crude oil costs due to a disruption in supply, stronger than expected economic growth or geopolitical tensions overseas could lead to higher pump prices nationwide, or regional prices could increase due to refinery problems, production cuts, stronger than anticipated demand, or hurricanes that impact distribution and production, which has happened in several Midwestern states over the past week.
Quick Stats
Mid-Atlantic and Northeast
Pump prices in the Mid-Atlantic and Northeast continue to drop, and while New York, Connecticut, Vermont, and Maine appear in the top-20 state averages, three other states in the region (Virginia, New Jersey, and Delaware) are now below $2 per gallon. These lower prices come even as some traders are watching announcements of planned reductions in production from refineries supplying the region as profit margins have narrowed.
Oil Market Dynamics
Ample domestic oil supplies and a strengthening U.S. dollar have contributed to West Texas Intermediate crude oil prices testing lows not seen since Spring. WTI is priced in U.S. dollars, so as the dollar strengthens, the price of oil becomes relatively more expensive for those holding foreign currencies. This makes oil a less attractive investment and helps reduce prices. If this trend continues, WTI could drop below $40 per barrel for the first time since April 18. At the close of Friday’s formal trading session on the NYMEX, WTI had recovered slightly from Thursday’s multi-month low to settle 46 cents higher at $41.60 per barrel.
Drivers 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.