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Gas Price Average Falls to Lowest Since May

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The national average gas price has dropped to its lowest level of the summer, falling 4.4 cents in the last week to an average of $2.829 per gallon today, according to GasBuddy data compiled from over 10 million price reports from over 135,000 stations in the last week.

“Last week saw a small party at the pump — gas prices in nearly all states moved lower as the national average fell to its lowest in 75 days,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “With Libya resuming oil exports, oil prices have been under pressure the last two weeks, falling briefly under $68 per barrel last week, closing out the week far lower than two weeks ago when oil prices touched $75. In addition, signs are pointing to greater oil production from both Russia and Saudi Arabia, further tempering fears of too little supply. It has been the large drop in the price of crude oil that has opened the door for gasoline and diesel prices to move lower for the time being. More good news? Retail gas prices still have some downward movement coming to catch up to the recent drop in oil.”

Oil prices start the week rising slightly to $68.61 per barrel, far lower than the $75 per barrel seen two weeks ago. Prices have fallen during the last two weeks as crude oil exports from Libya have resumed and data showing OPEC-led Saudi Arabia is increasing oil production. Data from the government last week also weighed on markets, showing U.S. oil inventories rose nearly 6 million barrels as U.S. production levels reached 11 million barrels per day for the first time ever.

While gas prices have followed oil lower thus far, prospects for a continuation were pushed aside over the weekend after President Trump’s geopolitical saber-rattling and mounting concern over a growing global trade row propelled by Iranian President Rouhani’s comments, threatening to close the Strait of Hormuz in the face of U.S. sanctions. President Trump responded in equal measure warning Iran to “NEVER, EVER THREATEN THE UNITED STATES AGAIN…” The bitter exchange seems to have helped oil rise 73 cents per barrel this morning.

The escalation in rhetoric between the U.S. and Iran may cause further unease in the future as Iran takes a nothing-to-lose approach to U.S. sanctions. The threatened disruption of the chokepoint for over one third of the world’s oil supplies would have the effect of creating shockwaves on energy markets as an already tightening global oil supply picture emerges. By all indications, production by Saudi Arabia, the UAE, Iraq and Kuwait, who are eating into their spare capacity, would be effectively cut off from sending crude to the world’s economies. As such, one cannot rule out prospects for severe shortages should the bellicose language turn into action later this fall.

For at least the next few days, pump prices continue to moderate and stand down nearly 10 cents from their peak just after Memorial Day and are at their lowest since early May, when prices were climbing.

Largest weekly gas price changes: Michigan (-12 cents), Ohio (-10 cents), Indiana (-9 cents), Illinois (-8 cents), Kentucky (-7 cents), Delaware (-6 cents), Arizona (-5 cents), Nebraska (-4 cents), Florida (-4 cents) and New Mexico (-4 cents).

Lowest average gas prices: South Carolina ($2.53), Alabama ($2.54), Mississippi ($2.54), Arkansas ($2.57), Missouri ($2.58), Oklahoma ($2.58), Louisiana ($2.58), Tennessee ($2.59), Virginia ($2.62) and Texas ($2.63).

Highest average gas prices: Hawaii ($3.75), California ($3.61), Washington ($3.39), Alaska ($3.35), Oregon ($3.28), Nevada ($3.20), Utah ($3.09), Idaho ($3.09), Connecticut ($3.04) and Pennsylvania ($3.02).

Gas prices are likely to continue drifting lower in most places for the early part of the week, but expect a hike in Great Lakes states like Michigan, Indiana, Ohio, Kentucky and Illinois by mid-week due to price cycling behavior in which stations continuously undercut each other before giving in and raising prices. Price declines may slow down versus last week, but all eyes remain on government data this week and any new geopolitical developments.

For budget-minded drivers, GasBuddy is the travel and navigation app that is used by more North American drivers to save money on gas than any other. Unlike fuel retailer apps, as well as newer apps focused on fuel savings, GasBuddy covers 150,000+ gas stations in North America, giving drivers 27 ways to save on fuel. That’s why GasBuddy has been downloaded nearly 90 million times – more than any other travel and navigation app focused on gas savings.