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U.S. Gas Prices Keep Falling into Fall

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Gasoline prices have fallen for the second consecutive week with the U.S. national average shedding nearly 6 cents per gallon, falling to $2.55 according to price-tracker GasBuddy.

“For the second straight week, almost every state saw average gasoline prices fall notably as refineries continue to heal after Harvey and work on restoring production of motor fuels,” said Patrick DeHaan, senior petroleum analyst for GasBuddy. “While oil prices have gained momentum in the last few weeks, it will not be enough to stymie the continued decline at gas pumps, which will bring the national average down another 5-10 cents in the week ahead.”

According to data from the U.S. Energy Information Administration, U.S. refiners operated at 83.2% in the week ending September 15th, a rise from 77.7% the week earlier, but still notably lower than the 96.6% the week prior to Hurricane Harvey’s arrival. Gasoline inventories fell 2.1 million barrels or 88.2 million gallons, but not as much as the previous week, when they plummeted by their largest amount in years. It will likely take weeks for inventories to fully recover from the imbalance in supply and demand caused by both Harvey and Irma. At the peak, nearly 28% of all U.S. refining capacity was offline, creating a deficit of over 2 million barrels per day of refinery production.

Distillate inventories have also plummeted as diesel supply remains challenged in areas affected by Harvey and Irma. Inventories stand nearly 16% lower than a year ago and fell 4% in the last week alone. Oil inventories, however, have rebounded due to the refinery shutdowns with oil supplies climbing 4.6 million barrels in the last week. Total petroleum inventories, however, have plummeted by nearly 55 million barrels versus a year ago.

A continuation of refineries recovering will likely continue to push gasoline prices down, even as oil prices have risen to 4-month highs of $51 per barrel, with the exception of some states in the Great Lakes region, where intense competition has driven down prices and some stations are selling gasoline at a large loss. Such moves are fairly common and are likely to trigger stations in Michigan, Indiana, Ohio, Kentucky and parts of Illinois to “reset” their prices in the next few days.

States with the top ten price decreases in the last week: Delaware (-10 cents), Michigan (-10 cents), Maine (-9 cents), Indiana (-9 cents), Illinois (-8 cents), Kentucky (-7 cents), New Jersey (-7 cents), Ohio (-7 cents), Maryland (-6 cents) and Virginia (-5 cents).

Leading the nation with the lowest average gasoline prices: Missouri ($2.28), Oklahoma ($2.29), Ohio ($2.30), Indiana ($2.33), Arkansas ($2.34), Kansas ($2.36), Illinois ($2.37), Louisiana ($2.38), Mississippi ($2.41) and Michigan ($2.42).

States with the highest average gas prices: California ($3.12), Hawaii ($3.06), Alaska ($3.04), Washington ($3.00), Nevada ($2.92), Oregon ($2.86), Connecticut ($2.84), Pennsylvania ($2.81), New York ($2.76) and Idaho ($2.74). The West Coast and Northeast remain a hotbed due to tight supply but should see continued relief in the week ahead.

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.

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