It’s a gas price decline that’s now entered a third straight week, the longest such decline since last June. The national average gasoline price has fallen 4 cents to $2.265/gallon in the last week, according to GasBuddy.com.
The downward trend has remained consistent for weeks, even as oil prices are seen as somewhat unstable, thanks to seasonally weak gasoline demand and gasoline inventories that have risen over 26 million barrels in the last month- a gain representing over three full days of gasoline supply. Weather is sure to have played a key factor in the weak demand figures- California has gotten soaked with flooding rains, limiting consumers desire to drive.
Demand estimates from the Energy Information Administration are eye-opening: gasoline demand down 7.7% so far in 2017 versus last year, barely making it past 8 million barrels per day, down nearly 20% versus peak summer demand season.
The surge in supply and plummeting demand have had a key role in gasoline prices falling in 45 of the nation’s 50 states during the last week. Just one state- Utah- saw gas prices climb by more than 2 cents on average (4.4 cents). The four other states seeing increases were mainly in the Rockies: Montana (+1.7 cents), Idaho (+1.3 cents), North Dakota (+0.6 cents) and Nevada (+0.2 cents). Leading decliners was Ohio (-10.4 cents), Michigan (-9.6 cents), Illinois (-8.6 cents) Indiana (-8.2 cents) and Delaware (-7.7 cents). 80% of the nation saw average prices fall by over 2 cents.
The nation’s cheapest gasoline has relocated away from the warmer weather of South Carolina, and was seen in Ohio ($2.01) where several stations in Oxford were selling gasoline at $1.52 per gallon, the nation’s lowest price. Stations in Indiana, the second cheapest state ($2.02) were as low as $1.62 in Franklin. Meanwhile, South Carolina ($2.03) saw it’s cheapest state considerably higher: $1.78. On the opposite end of the gas price spectrum: Hawaii ($3.08), California ($2.80), Washington ($2.73), Alaska ($2.68) and Pennsylvania ($2.56). Motorists in Western Pennsylvania can drive just a few miles into Ohio and fill up for 56 cents per gallon less. Gasoline in West Middlesex, PA off Interstate 80 is priced at $2.55, while six miles away in Hubbard, Ohio, stations charge $1.99.
Oil prices opened the week marginally lower with WTI crude oil at $53.14 per barrel, off just 3 cents. While OPEC’s oil production cuts have been remarkably successful, the rig count in the United States rose 18 in the last week, and stands 93 rigs more than a year ago (15%), a sign that U.S. oil production is getting back online as oil prices rise. The same benefit has been affecting Canadian oil producers, who added 3 rigs in the last week to 345 total rigs, up 114 (49%) versus a year ago.