BOSTON (Sept. 12) – The national average price for a gallon of regular gasoline continues its drop for the 11th consecutive day after rising sharply to finish the summer driving season according to GasBuddy which supplies the data for wane.com’s Gas Gauge.. The current national average, $2.18 per gallon, stands down nearly 3 cents versus last Monday, and remains well below (18 cents) a year ago, but the year-on-year gap has narrowed considerably in the few weeks.
Gasoline prices have continued falling after markets lost confidence in OPEC comments that were made in mid-August, suggesting the cartel was ready to cut oil production. In addition, prices rallied at the end of August slightly as Hurricane Hermine impacted oil production in the Gulf of Mexico and flooding in Louisiana shut some refining capacity.
While the threat for major storms can again disrupt fuel prices, the likelihood of a major impact is fading as gasoline demand fades and winter gasoline returns to pumps this Friday. Winter gasoline contains more butane, a generally cheap ingredient that is mostly removed in summer gasoline to meet EPA requirements. This savings is passed along to motorists in the autumn. Major U.S. cities that require ultra-stringent reformulated summer gasoline are those that are likely to see the largest cost savings from the switch.
In the U.S., nine states currently are enjoying average prices under $2 per gallon: South Carolina ($1.90 per gallon), Alabama ($1.94), Mississippi ($1.96), Texas ($1.97) New Jersey ($1.98), Louisiana ($1.99), Tennessee ($1.99), Virginia ($1.99) and Oklahoma ($1.99).
On the higher side, four states have averages over $2.50 per gallon: Hawaii ($2.78), California ($2.74), Washington ($2.67) and Alaska ($2.56).
Top five biggest changes in gasoline prices in the last week: Indiana (-11 cents), Michigan (-10 cents), Ohio (-9 cents), Nebraska (-7 cents) and Kentucky (-6 cents). The West Coast saw the nation’s largest increases: Utah (5 cents), California (5 cents), Hawaii (4 cents), Alaska (4 cents) and Washington (4 cents).
The Midwest saw some of the largest declines in the last week, driven by competitive behavior that results in price cycling every couple of weeks. As gasoline prices have fallen, wholesale prices remain similar to last week, leading GasBuddy analysts to believe that a price hike is likely coming soon. Refineries in the region are operating at high levels, but BP’s Whiting, Indiana refinery will be undergoing maintenance this fall, which could keep gasoline prices from falling as low as they otherwise may have.
The West Coast saw some large price movements, mainly in part due to issues at Chevron’s Richmond, California refinery that led wholesale prices in the entire region to move higher. While fuel prices may temporarily rise, expect an eventual return to falling prices. The West Coast maintains the biggest drop in gasoline prices versus a year ago compared to any other area, with gasoline prices some 40-70 cents lower than a year ago.
Rocky Mountain states have seen little fluctuation over the last week. Montana was virtually unchanged, while Wyoming rose fractions of a penny, Arizona was unchanged, New Mexico fell 2 cents, Colorado fell 2 cents, while Utah rose 5 cents due to the issues at California refineries.
South and Southeast
With Hurricane Hermine out of the way, oil production has resumed, and gasoline prices have continued to fall. The drops were led in the region by Georgia (-4 cents), Alabama (-4 cents), South Carolina (-4 cents), Louisiana (-3 cents), Florida (-3 cents). Seasonal maintenance at Valero’s Port Arthur, Texas refinery was underway, and was likely to be joined by other refiners doing maintenance in the weeks ahead.
Prices in Washington, D.C., New Jersey, Philadelphia, New York City, Boston area are set to continue their modest decline as this major area switches back to cheaper winter gasoline effective this Friday. With the switch back, the region will shift from stringent reformulated summer gasoline to conventional winter gasoline. Gasoline prices in all states in the region have declined in the last week, at nearly the same rate of the national average.