Repairs on Midwest refineries are now complete, driving down gas prices in many Midwestern states.
Gasoline prices continue to tumble in the wake of the Thanksgiving Holiday as average price nationwide dropped to $2.04 per gallon, which is within fractions of a penny of the multi-year low reached back in January.
The national average is tracking to fall below the $2 per gallon benchmark by Christmas. Gas prices are down three cents per gallon for the week, 14 cents during the last month and 74 cents compared to a year ago, according to the latest survey by AAA.
The decline in gasoline prices has helped fuel the boom in sales of trucks and utility vehicles, which tend to be less fuel efficient than midsized or compact passenger cars.
Pump prices in 22 states are now below $2 per gallon, and drivers in the Midwestern states of: Michigan, where prices dropped almost overnight to $1.81 per gallon; Missouri, also at $1.81 per gallon; and Ohio at $1.82 are paying the nation’s lowest averages at the pump.
Hawaii at $2.81 leads the country and is joined by regional neighbors California at $2.70 and Nevada at $2.53 as the priciest markets, according to AAA.
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Retail averages are down in 46 states week-over-week; however, prices have fallen more slowly than in recent weeks. Michigan is the only state where prices have moved lower by double-digit increments during this same period. At the other end of the spectrum, pump prices have moved higher in four states, although Indiana is the only state posting an increase of more than just fractions of a penny.
The national average has dropped for 24 of the past 30 days now that refinery maintenance is complete. Data from the U.S. Energy Information Administration points to rising refinery runs and output reaching its highest rates since September as playing a role in the price drops.
Demand for gasoline typically declines during the winter months and the gasoline market may become even more oversupplied in the near term, which should keep prices relatively low. Barring any unanticipated disruptions in supply, or swings in the price of crude oil, retail averages are expected to continue to fall leading into 2016.
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Consumers nationwide continue to experience significant yearly savings in the price of retail gasoline, thanks to the relatively low price of crude oil, which is not expected to end anytime soon.
Oversupply and a strengthening U.S. dollar continue to impact global oil markets, keeping downward pressure on the price of crude oil. Even the geopolitical tensions between Russia and Turkey, a major transshipment point for oil supplies, have yet to lead to any sustained increases in prices, and early reports indicate that tensions between the two countries will have little impact on production in the Middle East.
OPEC is scheduled to meet this Friday, and analysts expect that the cartel is unlikely to reduce production despite the relatively low price of crude oil.
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Domestic crude oil inventories remain elevated compared to previous years, and talks are now shifting toward the potential impacts of a surplus in gasoline inventories. WTI opened this week’s formal trading posting gains after closing out last week’s formal trading session on the NYMEX down $1.33, settling at $41.71 per barrel.