CINCINNATI, Oh. – For the first time in weeks, all Great Lakes and Central states are seeing gas prices decline, with some pump prices declining by double-digits.
Six states top the list of the largest decreases in the country: Ohio (-14 cents), Michigan (-12 cents), Indiana (-10 cents), Illinois (-8 cents), Kentucky (-7 cents) and Wisconsin (-5 cents).
The current average price for regular gas in Ohio is $2.68.
What is driving down gas prices?
A factor helping to drive down gas prices is the increase of nearly 600,000 bbl of gasoline inventories amid declining gasoline demand. With the build, EIA data measures levels at 52 million bbl once again, which, despite being a low inventory level for the region this year, is a 2.4 million year-over-year surplus. If inventories continue to increase, prices are likely to continue to decrease.
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.
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 Jenifer Moore, AAA spokeswoman. “Two events last week caused small spikes in retail prices, but those spikes are short-lived.”
On Wednesday, October 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 clean-up efforts are underway and as power is restored, fuel deliveries will be a priority.
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.
- The nation’s top 10 least expensive markets are: Mississippi ($2.61), South Carolina ($2.61), Alabama ($2.62), Missouri ($2.65), Arkansas ($2.65), Louisiana ($2.65), Texas ($2.65), Delaware ($2.66), Virginia ($2.67) and Tennessee ($2.68).
- The nation’s top 10 largest weekly changes are: Ohio (-14 cents), Michigan (-12 cents), Indiana (-10 cents), Washington (+9 cents), Oregon (+9 cents), Illinois (-8 cents), Kentucky (-7 cents), Delaware (-5 cents), Wisconsin (-5 cents) and Oklahoma (-4 cents).
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.
AAA provides automotive, travel and insurance services to 59 million members nationwide and more than three million members in Ohio. AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years. AAA is a non-stock, non-profit corporation working on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel and track their roadside assistance service with the AAA Mobile app for iPhone, iPad and Android. For more information, visit www.AAA.com.