(GasBuddy) For the sixth straight week and now 45 straight days, the national average price of gasoline has fallen, posting a drop of 5.7 cents over the last week to $1.91 per gallon on Monday according to GasBuddy data compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country. The average price of diesel, meanwhile, fell 4.7 cents to $2.56 per gallon.
“The national average continues to fall as every state has seen yet another decline in average gas prices over the last week as overall oil demand remains constrained due to COVID-19,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “The decline has been most significant thus far in the Great Lakes, due to the region being landlocked and challenging to ship gasoline out of, prices have been depressed significantly, driving these states to some of the lowest prices in the country. In fact, Wisconsin yesterday saw its lowest state average for gasoline in nearly 6,300 days- they haven’t been lower since 2003. For those not in the Great Lakes, there’s still good news: average prices will continue to play catch up for the next few weeks or longer.
Do keep an eye on this week’s potential meeting between major oil producers Russia and Saudi Arabia, however. On hopes of a production cut, oil rallied nearly $7 per barrel last week, but Tuesday’s meeting was postponed. If there is an oil production cut, it may establish a floor to oil prices, but motorists need not worry- if there is a cut, it is highly unlikely to cause a surge in gas prices, as retail prices have not come close to matching the declines in wholesale prices to this point.”
Crude oil prices surged late last week after President Trump signaled that he talked to Russia and Saudi Arabia, whom agreed to meet and cut oil production. Oil surged from $20.55 on Monday and closed the week above $28 and had its largest single-day percentage increase Thursday, but word began to spread on Saturday that the two parties clashed and the web-meeting scheduled for Monday would be postponed. As of Sunday evening as a result of the postponement, oil prices began moving lower again, at one point down 8%. As of press time Monday morning, a barrel of West Texas Intermediate crude oil was down 86 cents per barrel, or 3.03%, to $27.47 per barrel. Brent crude had seen an even larger rise over the last week.
As of Monday morning, Brent crude oil was down 82 cents to $33.29, compared to $23.03 a week ago. All eyes will be on what happens with oil production this week when and if Saudi Arabia and Russia do meet. For now, motorists shouldn’t worry too much about a potential oil production cut impacting gas prices as retail prices still have substantial room to fall to catch up to lower wholesale prices.
Data from the Energy Information Administration last week finally showed a gaping hole between supply and demand. Oil inventories soared by 13.8 million barrels, while gasoline inventories jumped 7.5 million barrels. Distillate inventories, which includes diesel, fell 2.2 million barrels. Refiners began to tweak their runs to produce less gasoline as gasoline production fell to 7.5 million barrels, a large 2 million barrel drop, as distillate production rose to 5.0 million barrels per day.
Refiners are likely maximizing the use of heavier feedstock to yield more heavy products like diesel, given that diesel demand remains much stronger than gasoline. Refinery utilization fell 5% to just 82.3% of capacity as refiners slow down operations given the large reduction in demand.
At gas pumps, prices continue to move lower, albeit at a much slower pace this week. Over 110,000 gas stations are selling gasoline under $2/gal Monday, with nearly 20,000 stations under $1.50/gal. The most common gas price across the country stands at $1.79 per gallon, unchanged from a week ago, followed by $1.69, $1.89 and $1.59. The average cost at the priciest 10% of stations stands at $2.94 per gallon, up 2 cents from a week ago, while the lowest 10% average $1.34 per gallon, down 9 cents from a week ago. The median U.S. price is $1.79 per gallon, down 7 cents in the last week and about 12 cents lower than the national average. As expected, some of the nation’s lowest gas prices continue to show up in unusual places. The Great Lakes boasts the highest number of states in the Top 10 for lowest averages, with Wisconsin leading the country with the lowest average at $1.43 per gallon, their lowest level since 2003. For a complete listing of all 50 state averages, please visit https://www.gasbuddy.com/usa. For cities and state data, visit http://fuelinsights.gasbuddy.com/.