Average gasoline prices have continued to fade across much of the country, with 47 of the nation’s 50 states seeing decline while the national average fell 3.5 cents in the last week to $2.465 per gallon according to price-tracker GasBuddy.
But while gas prices have fallen, GasBuddy Head of Petroleum Analysis Patrick DeHaan throws some caution to the wind. “With OPEC deciding last week to extend last year’s agreement on oil production cuts, the future for gasoline prices isn’t as rosy. While the short term may feature more modest price decreases is many areas, as we set our sights on the months ahead, 2018 is starting to look ominous as a result of OPEC’s extension. U.S. oil inventories are already 100 million barrels lower than where they were last year as a result of the belt tightening, leading 2017’s yearly average gas price to close out at the highest since 2014. Motorists should enjoy the falling prices now because it’s likely that prices may again rise approaching the New Year as oil prices continue to show strength.”
Oil prices have given up some ground in the last few days but are still within close reach of multi-year highs and currently stand at $57.61 per barrel as of Monday morning, down some 75 cents in early trading. The decline is at least partly fueled by rising rig counts in the United States, likely coming as a result of higher oil prices that were fueled by OPEC’s year-old production cuts which have caused a drop of nearly 120 million barrels in U.S. oil inventories versus last year.
Gasoline demand finally saw a seasonal stumble, dropping under 9 million barrels for the first time since February. Previous weeks saw gasoline demand numbers more consistent with summer demand, leaving less surplus gasoline to go into inventories, but last week saw gasoline inventories rise nearly 4 million barrels, but are still down nearly 45 million barrels from earlier this year, a factor contributing to the relatively high prices in recent weeks.
Across the country, the largest changes in average gas prices by state: Indiana (-10 cents), Illinois (-9 cents), Ohio (-8 cents), Michigan (-7 cents), Wisconsin (-5 cents), Delaware (-5 cents), Missouri (-4 cents), Oklahoma (-4 cents) and West Virginia (-4 cents).
States with the lowest average gas prices: Alabama ($2.20), Mississippi ($2.21), Missouri ($2.22), Oklahoma ($2.23), South Carolina ($2.24), Arkansas ($2.24), Tennessee ($2.26), Texas ($2.26), Louisiana ($2.28) and Virginia ($2.31).
States with the highest average gas prices: Hawaii ($3.21), Alaska ($3.18), California ($3.15), Washington ($2.96), Oregon ($2.80), Nevada ($2.78), Pennsylvania ($2.76), Connecticut ($2.71), New York ($2.68) and Montana ($2.62).
Gas prices are likely to rise this week in the Great Lakes, where competition has driven average prices down 28-35 cents in Indiana, Illinois, Ohio and Michigan, and stations in some areas are now selling gasoline under cost, which typically leads to a large price movement. Elsewhere, much of the rest of the nation may see gas prices continue to slowly trickle lower, but higher prices are on the horizon.