GasBuddy: Prices at the pump could fall for several weeks

National/World

(GASBUDDY) For the second straight week, the nation’s average gas price has declined, falling 1.9 cents from a week ago and stands at $3.39 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 is up 2.8 cents from a month ago and $1.30 per gallon higher than a year ago. The national average price of diesel has risen 0.1 cent in the last week and stands at $3.63 per gallon.

“With oil prices plunging nearly $10 from the recent peak of $85 per barrel, motorists will start to see gas prices decline nationwide, just in time for Thanksgiving, and the decline could stretch for several weeks,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “It’s not impossible- so long as oil prices hold near these levels or continue falling- that the national average could shed 15 to 30 cents per gallon over the coming weeks, while some areas like California could see declines of as much as 25 to 40 cents. While there’s reason to be optimistic that the peak of gas prices will soon be behind us, the decline in the price of oil is likely reflecting the possibility of a coordinated global release of oil from strategic reserves. If that doesn’t happen, oil could again rally. However, with Covid cases on the rise again reducing global demand, it does seem the most likely outcome will be a drop in gas prices that could last several weeks.”

OIL PRICES

Crude oil prices saw heavy selling over the last week as global cases of Covid-19 began to accelerate and some countries went back to lockdown mode, limiting oil consumption. In early trade, a barrel of West Texas Intermediate crude oil was down 51 cents to $75.43 per barrel, shedding nearly $6 from a week ago when prices started the week at $81.56 per barrel. Brent crude oil also saw heavy selling and was down 55 cents in early trade to $78.34 per barrel, down from $83.07 last Monday. Oil prices were on the ledge and are dangerously near longer-term bottoms, and should oil prices fall slightly further, could enter correction territory, triggering perhaps larger declines.

According to Baker Hughes, last week’s U.S. rig count rose by 7 to 563, and was 253 rigs higher than a year ago. The Canadian rig count fell by 1 to 167, or 66 more than a year ago.

OIL AND REFINED PRODUCT INVENTORIES

According to data from the Energy Information Administration last week, U.S. crude oil inventories fell 2.1 million barrels and stand 7% below the five year average for this time of year, while domestic crude oil production also saw a slight drop to 11.4 million barrels per day. Gasoline inventories fell by a slight 700,000 barrels and stand 4% below the five year average range, while distillate inventories also declined by 800,000 barrels and stand 5% below the five year average range. Implied gasoline demand, a proxy for retail gasoline demand, fell 18,000bpd to 9.24 million barrels per day. Refinery utilization continued to rally, posting a rise of 1.2 percentage points to 87.9% nationally.

FUEL DEMAND

According to GasBuddy demand data driven by its Pay with GasBuddy card, U.S. retail gasoline demand rose for the third straight week to the highest since late August. Nationally, weekly gasoline demand was up 2.1% from the prior week, while demand rose 2.1% in PADD 1, rose 1.1% in PADD 2, rose 3.8% in PADD 3, fell 1.5% in PADD 4 and rose 1.2% in PADD 5.

GAS PRICE TRENDS

The most common U.S. gas price encountered by motorists stood at $3.19 per gallon, unchanged from last week, followed by $3.29, $3.35, $3.09 and $3.39 rounding out the five most common prices.

The average cost at the priciest 10% of stations stands at $4.41 per gallon, down 12 cents from a week ago, while the lowest 10% average $2.88 per gallon, down 4 cents from a week ago.

The median U.S. price is $3.29 per gallon, unchanged from last week and about 10 cents lower than the national average.

The states with the lowest average prices: Oklahoma ($2.93), Texas ($2.98) and Arkansas ($3.01).

The states with the highest priced states: California ($4.68), Hawaii ($4.30) and Nevada ($3.97).

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