Oil prices fuel slow drop in gas prices

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FILE – In this Thursday, July 16, 2015, file photo, a customer re-fuels her car at a Costco in Robinson Township, Pa. The plunging price of oil in 2016 is dragging stock markets to their worst start to a year ever, even though low fuel prices are great for consumers and most companies. (AP Photo/Gene […]

Relief is beginning to show up at pumps across the county: the national average gasoline price has fallen two cents per gallon in the last week to $2.94 per gallon Monday, according to GasBuddy’s survey of 135,000 gas stations. 40 states saw gas prices move lower in the last week, while 10 saw prices increase slightly.

“Finally some moderation has hit tens of thousands of gas stations across the country, following the drop in oil prices in recent days,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “We may have dodged a bullet in avoiding the $3 per gallon level for now, but not everything is rosy yet. While nearly forty states saw average prices drop in the last week, ten still saw small increases, so this is not an all-inclusive party by any means. Prices remain well above their year-ago level, costing the country $228 million more every day versus a year ago. Moving forward, all eyes remain on OPEC and their coming meeting to see if they’ll push oil prices higher, or if they’ll allow a respite for the summer driving season.”

Oil prices continued their downward move last week, paving the way for additional drops in gasoline prices in the near future. A barrel of West Texas Intermediate crude oil was $65.37 per barrel in Monday morning trading, down from $72/bbl hit just two weeks ago, a drop of nearly $7 per barrel. The collapse in price comes even as data from the Energy Information Administration showed U.S. oil inventories falling 4.2 million barrels in the last week, still hovering in the lower half of the average range for this time of year. Gasoline inventories, however, posted a small 500,000 barrel rise but were still slightly lower than last year. Refinery utilization rebounded sharply, rising to nearly 94%, a rise of over 2% with refineries in the Midwest running at 100%, cranking out products. Overall, U.S. total oil stocks remained about 10% lower than last year, but refiners have kept pace with high demand as the U.S. economy continues to look strong.

Looking state-by-state, the largest weekly changes in average gas prices were seen in: Michigan (-13 cents), Ohio (-9 cents), Delaware (-8 cents), Kentucky (-6 cents), Montana (+5 cents), Florida (-4 cents), Maryland (-4 cents), Illinois (-3 cents), North Carolina (-3 cents) and Tennessee (-3 cents).

States with the lowest average gasoline prices: South Carolina ($2.61), Mississippi ($2.63), Alabama ($2.64), Oklahoma ($2.65), Louisiana ($2.66), Arkansas ($2.67), Missouri ($2.69), Tennessee ($2.69), Kansas ($2.71) and Virginia ($2.74).

States with the highest average gasoline prices: California ($3.73), Hawaii ($3.68), Washington ($3.45), Alaska ($3.37), Oregon ($3.34), Nevada ($3.31), Utah ($3.18), Idaho ($3.16), Connecticut ($3.15) and Arizona ($3.09).

Gas prices are likely to continue moderating in most states in the coming week as lower oil prices drag gasoline prices down further, but with OPEC’s meeting upcoming to discuss previous production cuts, the market is expecting additional supply. Should OPEC withhold it, oil prices may not remain low for long.

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