GASBUDDY – For the third straight week the nation’s average gas price has fallen, posting a decline of 2.2 cents per gallon from a week ago to $3.12 per gallon Monday according to GasBuddy data compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country. The national average now stands unchanged from a month ago and $1.01 per gallon higher than a year ago.
The national average price of diesel has fallen a penny in the last week and stands at $3.26 per gallon.
However, the string of weekly declines is likely to end this week with gas prices likely starting to drift higher as a result of refinery shutdowns ahead of Hurricane Ida. Motorists can expect that over the next few weeks, the national average may rise 5-15 cents per gallon or so, subject to damage assessments happening this morning. In addition, prices are likely to jump in the Great Lakes states early in the week due to a local pricing behavior called price cycling.
“While the national average price of gasoline declined yet again over the last week, Hurricane Ida has been causing countless disruptions to critical infrastructure, including oil production, refineries and pipelines. We’re likely to see a reversal this week, but motorists need not be too concerned at this point,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “I expect the national average to rise in the neighborhood of 5-15 cents per gallon in the next couple of weeks- far smaller than the impact from Hurricanes Katrina and Harvey, but with damage assessments still to come, it’s possible we see slight deviation from that. While Colonial Pipeline shut Lines 1 and 2 as a precaution, it’s highly unlikely that this will cause any long-term disruption to fuel supply like we saw months ago after the company was hacked. The biggest question for refineries will be the flooding- which could alter the rise in gas prices, but the odds of a massive surge in gas prices nationwide are extremely low.”
With Hurricane Ida shutting down a significant portion of U.S. domestic oil production, one might expect oil to rise. However, with Ida also shutting down some of the nation’s largest refineries in Louisiana, there’s also lower demand for crude oil, and could be for several days or weeks, so long as those refineries remain down, which is likely after a deluge of rainwater. In early Monday trade, a barrel of West Texas Intermediate crude oil was down 40 cents per barrel to $68.34, still up from last week’s $64.18 tally. Brent crude oil was also softer in Monday trade, down 33 cents to $72.33 per barrel, but still at a premium to last Monday’s $67.27 level.
According to Baker Hughes, last week’s U.S. rig count rose by 5 to 508, and was 254 rigs higher than a year ago. The Canadian rig fell by 9 to 147, or 93 more than a year ago.
OIL AND REFINED PRODUCT INVENTORIES
In its weekly report, the Energy Information Administration showed that crude oil inventories fell by 3 million barrels and are about 6% below the five year average for this time of year, while gasoline inventories fell 2.2 million barrels and are 3% below the five year average. Distillate inventories were the exception and saw a rise of 600,000 barrels, but they also remain about 8% lower than the five year average. Implied gasoline demand, measuring gasoline moving toward retail pumps, rose 239,000 barrels per day to 9.57 million barrels per day. Refinery utilization also edged higher by 0.2 percentage points to 92.4%.
According to GasBuddy demand data driven by its Pay with GasBuddy card, U.S. retail gasoline demand fell for the third straight week. Nationally, weekly gasoline demand fell 0.4% from the prior week, while demand fell 2.6% in PADD 1, fell 0.6% in PADD 2, rose 3.6% in PADD 3, rose 0.5% in PADD 4 and fell 0.9% in PADD 5.
GAS PRICE TRENDS
The most common U.S. gas price encountered by motorists was $2.99 per gallon, unchanged from last week, followed by $2.89, $2.79 and $3.09.
The average cost at the priciest 10% of stations stands at $4.20 per gallon, down 2 cents from a week ago, while the lowest 10% average $2.64 per gallon, down 2 cents from last week.
The median U.S. price is $2.99 per gallon, unchanged from last week and about 13 cents lower than the national average.
The states with the lowest average prices: Texas ($2.75), Mississippi ($2.76) and Alabama ($2.79).
The states with the highest priced states: California ($4.36), Nevada ($4.01) and Hawaii ($4.01).