National Average Eyes $2 for First Time Since 2009

Pump prices have fallen for ten consecutive days, reaching today’s national average price of $2.16 per gallon. AAA believes that average U.S. prices should continue to decline and could drop below $2 per gallon by Christmas for the first time since 2009.

Drivers are benefitting from relative savings in the price of retail gasoline with today’s average six cents less per gallon than one week ago and 11 cents less than one month ago. The price of crude oil remains noticeably low compared to previous years, and as a result, retail averages are down 74 cents per gallon year-over-year.

Refinery production in the Midwest appears to be recovering, which should help improve prices in the region. For example, the ExxonMobil refinery in Joliet, Illinois, has reportedly concluded its scheduled maintenance and returned to production. This and other refinery restarts in the Midwest have led to large weekly and monthly price discounts in Ohio, Illinois, Indiana and Michigan.

Locally, South Jersey gas prices have remained relatively flat for the past month or so. Today’s price for a gallon of unleaded gas is $1.95, which was the same price as last week. One month ago, the price was $1.94. However, today’s price represents a savings of 76 cents per gallon compared to this time last year ($2.71).

Historically, gasoline demand tends to decline during the month of November, and with the autumn refinery maintenance season nearing completion, pump prices are expected to move lower to close out the year, barring any unanticipated outages or supply disruptions. Eleven states are posting averages below $2 per gallon, with motorists in South Carolina ($1.91) and Alabama ($1.92) paying the nation’s lowest averages to refuel their vehicles. The nation’s most expensive markets are located in states west of the Rockies, led by Hawaii ($2.86), California ($2.80), Nevada ($2.67), Washington ($2.52) and Oregon ($2.41).

Averages in the vast majority of states (46) are down week-over-week. Drivers in 18 states are saving a nickel or more per gallon at the pump, and prices have fallen by double-digit increments in nine states with Ohio (-18 cents), Indiana (-18 cents), Michigan (-18 cents) and Kentucky (-15 cents) posting the largest weekly discounts. Pump prices moved higher on the week in four states including Florida, Oregon, Washington and New Jersey. However, Florida (+4 cents) is the only state where prices increased by more than fractions of a penny week-over-week.

Monthly price comparisons are following the overall trend of falling prices. Motorists in 47 states and Washington, D.C. are enjoying savings at the pump month-over-month, and averages in nearly half of the states (23) have dropped by more than a dime per gallon. The largest savings are again seen in the Midwestern states of Ohio (-33 cents), Illinois (-32 cents) and Indiana (-32 cents). On the other end of the spectrum, drivers in three states, Oregon (+5 cents), Washington (+2 cents) and New Jersey (+2 cents) have seen higher prices over the past month.

Year-over-year, consumers nationwide are paying less to refuel their vehicles. Retail averages are discounted 75 cents or more in 28 states and Washington D.C., and motorists in Alaska (-$1.22) and Hawaii (-$1.10) are benefitting from yearly savings of more than $1 per gallon. California (-36 cents) and Nevada (-39 cents) are the only two states posting yearly savings of less than 50 cents per gallon.

A bearish sentiment prevails with global petroleum prices, and traders are following the recent terrorist attacks in France to determine what effects it may have on the market. Global supply continues to outpace demand, while a strengthening U.S. dollar, which makes crude oil more expensive for buyers holding foreign currencies, is expected to keep a ceiling on prices into 2016.

U.S. crude oil inventories continue to build, and according to the U.S. Energy Information Administration, are within reach of hitting record levels set this past April. For the first time in more than two months, the U.S. oil rig count increased on Friday. While this measure is not the best indicator of production, it reportedly reinforced the expectation that U.S. production rates will remain high and keep the market oversupplied in the near term.

WTI opened this week’s trading session posting gains, though prices have since declined. This comes following a week of testing the $40 per barrel threshold, and closing Friday’s formal trading session on the NYMEX, down $1.01, settling at $40.74 per barrel, a closing price that represents a loss of nearly 10 percent on the week.

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.