For the first time since November, the national average has seen a weekly drop, falling 3.2 cents to $2.339 per gallon according to GasBuddy. The fall comes as crude oil prices take a breather and gasoline inventories surge, putting downward pressure on pump prices.
“The national average price for gasoline has fallen over the last week, helped by weak demand and rising gasoline inventories,” said Patrick DeHaan, senior petroleum analyst for GasBuddy. A total of 36 states saw gasoline prices fall in the last week, led by Great Lakes states: Indiana fell 13.9 cents, Ohio fell 13.1, Michigan tumbled 10.9 cents, Kentucky fell 8.7 cents and Illinois dropped by 6.2 cents, thanks to some relief from refinery issues in the last few weeks.
The downward trend is evident in over two-thirds of states but may take additional time to materialize in others. This is a familiar pattern for late winter as refiners build inventories prior to the late-February start of refinery maintenance season, and thanks to the year’s weakest demand occurring over the next four weeks.
Meanwhile, Rocky Mountain states saw the largest increases in the country with Utah up 5.8 cents for its first major rise since OPEC’s production cuts announced in November. Idaho advanced 4.1 cents and Montana rose 3.4 cents, rounding out the top three in the country.
“However, motorists shouldn’t expect the trend to last long. After the sweetness of Valentine’s Day roses and chocolates is gone, they will be in store for a jump at the pump as maintenance season begins and the long transition to summer gasoline becomes a pinch point, leading to gas prices that will mostly trend higher for two to three months,” DeHaan said.
To begin the week, the nation’s lowest gasoline prices can be found in South Carolina and Oklahoma, where prices average $2.11/gallon. Aiken, SC was the nation’s cheapest metro area, with gas prices averaging $2.045/gallon, followed by Rock Hill, SC at $2.051 and Sumter, SC at $2.063. Lubbock, TX followed, coming in at $2.066, while Cleveland, TN rounded out the top five at $2.068/gallon.
On the other side of the list, Hawaii was home to the nation’s priciest gallon of gasoline at an average $3.05, followed by California ($2.81) and Washington ($2.74). Kahului, HI was the only city over $3 per gallon average, seeing an average gallon priced at a whopping $3.44 per gallon, followed by San Luis Obispo, CA at $2.955 and San Francisco, CA at $2.95. Honolulu ($2.942) and Fairbanks, AK ($2.921) rounded out the top five.
Crude oil prices, meanwhile, remained constrained between $51-$54 per barrel last week as the U.S. rig count fell by 6 rigs, but stands up 9 rigs (1%) from last year. In Canada, the rig count has exploded, rising 110 in the last week to 315 rigs, some 88 (39%) higher than a year ago. All of these factors are likely to place additional pressure on oil prices, which saw inventories rise 4.1 million barrels in the last week, while gasoline inventories saw a more robust rise of 5.0 million barrels as refiners prepare to begin maintenance season.
The first part of week ahead will likely see a moderate fall in the national average, which may rebound by the weekend due to gas prices likely rising (cycling) in Great Lakes states, a phenomenon that repeats every 1-2 weeks on average; yet by next week, a majority of states are likely to see gas prices trending lower.