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Gas Price Decline Enters Ninth Week

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For the ninth straight week, gas prices have fallen, with the national average falling 2.7 cents over the last week to $2.41 per gallon, the lowest in over a year, according to GasBuddy data compiled from more than 10 million individual price reports. The national average price of diesel also moved lower, falling 3.0 cents to an average of $3.11 per gallon. The lowest gas price in 27 states is now under $2 per gallon while Missouri became the first state to see its average fall under $2 to $1.98 per gallon.

“Average gas prices have continued to move lower in most states in the last week as retail prices continue to catch up to the low price of oil. 27 states boast a low price of $2 per gallon or less, and Missouri’s statewide average will likely fall under $2 per gallon this week, representing the first state to cross the psychological barrier,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “While the going has been good at most gas pumps, OPEC countries did agree to curb oil production, but the cut was smaller than we had expected, and for a shorter duration than anticipated, resulting in a small upward move in oil, one that may not immediately curb the declines. We appear poised to see the national average drop perhaps at least one more week- and we could close this week with the nation’s average in the $2.30s- the lowest in over a year.”

The national average is currently 5 cents per gallon lower than its year-ago level and 29 cents lower than a month ago. The lowest price in 27 states stands under $2 per gallon today, while nearly 50 metro areas now feature an average price of under $2 per gallon, led by Sherman-Denison, TX where the average price is $1.86 per gallon this morning. A full list of cheapest and most expensive metros and states can be seen here: http://fuelinsights.gasbuddy.com/Top25

The drop at the pump has continued as retail prices play catch up to the relatively low price of oil, which was lower Monday morning by 65 cents per barrel at $51.96 for West Texas Intermediate crude oil. The last-minute deal by OPEC and several non-OPEC nations on Friday to cut 1.22 million barrels of crude production per day was only a temporary catalyst, giving WTI a $1.12 a barrel lift to $52.61 Friday, while Dated Brent accepted a $1.61 a barrel increase to $61.67. Concern over a slowing global outlook, the likelihood that the Federal Reserve won’t raise interest rates this month and escalation of tensions between the U.S. and China over last week’s arrest in Canada of Huawei Technologies’ CFO, Meng Wanzhou, have effectively set commodity markets on a bearish downward slide this morning.

Despite rig counts dropping by 10 last week, according Baker-Hughes and Alberta cutting back 325,000 barrels of oil output per day beginning January 1, markets appear spooked and are shedding nearly a dollar in value for the crudes while refined products are suffering a 2 cent a gallon setback as fundamentals get short shrift in favor of outright pessimism on the state of the world’s economic outlook.

Setting aside the daily cut and thrust of energy markets, the longer term sees lower energy prices yielding potentially higher demand and perhaps a not-so-insignificant boost to the global economy as a whole as the cost of energy wanes. Though short-term assumptions about the direction of markets stand or fall based on the latest headline or worry, moves to tighten crude supply, despite U.S. increased production also has longer-term implications that are supportive of higher crude and fuel prices into 2019. While the day ahead and indeed the week could result in markets remaining in neutral to the downside, a breakout in energy commodity prices is possible, especially if the EIA’s Weekly Petroleum Status Report on Wednesday turns in a draw in supplies for a second week in a row.

45 states saw average gas prices decline in the last week, while Michigan (+12 cents), Indiana (+8 cents), Ohio (+6 cents), Kentucky (+3 cents) and Illinois (+2 cents) were the only areas to see prices rise, largely due to a pricing behavior called “price cycling” in those states as prices plunge to under cost only to see gas stations “reset” their prices.

States with the lowest average gas prices: Missouri ($1.98), Oklahoma ($2.00), South Carolina ($2.04), Texas ($2.04) and Kansas ($2.05).

States with the highest average gas prices: Hawaii ($3.50), California ($3.44), Washington ($3.23), Alaska ($3.10) and Nevada ($3.06).

Motorists in most states will again likely see average gas prices decline in the week ahead with the national average soon falling into the $2.30s.

GasBuddy is a company that connects drivers with their Perfect Pit Stop. As the leading source for crowdsourced, real-time fuel prices at more than 150,000 gas station convenience stores in the U.S., Canada and Australia, millions of drivers use the GasBuddy app and website every day to find gas station convenience stores based on fuel prices, location and ratings/reviews. GasBuddy’s first-of-its-kind fuel savings program, Pay with GasBuddy, has saved Americans more than $6 million at the pumps since its launch in 2017.