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Sun Sets on Rising Gas Prices in Majority of Country, For Now

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Average gasoline prices in the United States have faded in the last week, falling 2 cents per gallon to $2.32 as oil prices failed to recapture the key $50 level and instead dropped to as low as $46 per barrel last week even after government data showed a larger than expected decline in crude oil inventories. Some 40 states joined in the decline which was led by large declines in the Great Lakes, while 10 states saw average prices rise, mainly the West Coast and Rockies where high demand ahead of the eclipse was still putting pressure on prices.

Data last week from the Energy Information Administration (EIA) showed a drop of 8.9 million barrels in crude oil inventories, a larger drop than was anticipated by analysts, bringing total inventories to their lowest since January 2016. Inventories have continued to decline from a peak of 536 million barrels in late-March to the present level of 466 million barrels. Gasoline inventories were unchanged in the last week, however, as refineries utilized 96.1% of their capacity to churn out fuels and products.

States with the largest weekly change in average prices versus a week ago: Oregon (+12 cents), Michigan (-11 cents), Indiana (-8 cents), Idaho (+8 cents), Ohio (-8 cents), Illinois (-6 cents), Washington (+5 cents), New Jersey (-4 cents), Massachusetts (-3 cents) and South Carolina (-3 cents).

The states with the cheapest average gasoline prices are: South Carolina ($2.05), Alabama ($2.08), Mississippi ($2.08), Oklahoma ($2.10), Missouri ($2.10), Arkansas ($2.10), Tennessee ($2.12), Texas ($2.14), Louisiana ($2.14) and Virginia ($2.16).

Oil prices last week traded as low as $46 per barrel but finished the week with a gain of $1.40 per barrel to $48.51 yet remained under the key $50 per barrel mark that prices have not been able to recently breach. Geopolitical tensions continued to cool in the last week, but oil prices jumped late in the week after Baker Hughes reported the oil rig count dropped by 5 to 763 rigs, the largest weekly drop since January, perhaps signaling that the recent low oil price environment may be taking its toll on producers.

Motorists will likely see a mixed bag at the pump in the week ahead, depending on their location. Areas of the Pacific Northwest may continue to see eclipse fueled demand spurts and higher prices before some cooling towards the end of the month while prices in the Great Lakes may move higher due to the price cycling phenomenon common in the region. The Plains, South, Mid-Atlantic, Northeast and New England regions may all see gas prices drift lower in the week ahead.

Looking at the Atlantic, three disturbances that developed last week all have failed to organize with the strongest one off the coast of Nicaragua showing a 50% chance of cyclone formation in the next 48 hours, according to the National Hurricane Center, but posing little threat to oil infrastructure in the Gulf of Mexico.

Head of Petroleum Analysis (USA)

Patrick has developed into the leading source for reliable and accurate information on gas price hikes. Patrick has been interviewed as a gasoline price expert hundreds of times since 2004. Based in Chicago, Patrick brings to GasBuddy all his assets to help consumers by giving reliable and accurate price forecasts, including the San Jose Mercury News dubbing Patrick "one of the nation's most accurate forecasters" in 2012.

Oil At A Crossroads
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