At $2.89, the national gas price average is two cents cheaper than it was a week ago amid consumer gasoline demand declining for a third week. Today’s gas price average is four cents more than a month ago and 42 cents more expensive than a year ago, according to the latest research from AAA.
AAA says the majority of states have seen gas prices decrease on the week with the exception of a handful of states, some of which were impacted by fuel disruptions on the west coast and in the southeast.
“Gas prices may be signaling that they are taking a turn toward slowly decreasing, which is a welcomed change for motorists who have been paying unseasonably high pump prices to fill-up as of late,” said Jeanette Casselano, AAA spokesperson. “Two events last week caused small spikes in retail prices, but those spikes are short-lived.”
On Wednesday, Oct. 12, Hurricane Michael made landfall in Florida and subsequently caused retail fuel shortages along its path in Alabama, Florida, Georgia, North Carolina and South Carolina. Roadway cleanup efforts are underway and as power is restored, fuel deliveries will be a priority, according to AAA.
In addition, last week, a natural gas pipeline rupture in the Western Canadian province of British Columbia forced three Pacific Northwest (PNW) Puget Sound refineries to shut production units. Those refineries are beginning to resume normal operations, but states in the PNW saw spikes in gas prices that will likely last into the week.
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI increased 37 cents to settle at $71.34. Oil prices saw whiplash last week, falling in line with the major selloff that occurred for the Dow Jones Industrial Average. Crude prices may continue to climb this week as tensions in the Middle East take center stage, while U.S.-imposed sanctions on Iran’s energy sector continue to loom over the market.
The slight gains crude prices saw at the end of last week occurred despite total domestic crude inventories growing to 410.0 million bbl last week, according to EIA’s latest weekly petroleum status report. However, crude storage levels are 52.2 million bbl lower than where they were this time last year. The year-over-year deficit has contributed to rising crude prices, which has led to the most expensive fall gas prices since 2014.
In related news, Baker Hughes Inc. reported that the U.S. gained eight oil rigs last week, bringing the total to 869. When compared to last year at this time, there are 126 more rigs now than in 2017.