Richmond unleaded gas at $1.99 a gallon

Today’s Richmond metro gas price average of $1.99 has tumbled $1.20 compared to this same day last year, the lowest price of gasoline in Richmond since May 2009. The price at the pump has fallen in Richmond by eight cents in the last week and 45 cents over the last month.  Moreover, some isolated stations within the metro area are selling gas as low as $1.84 per gallon on average.

“Richmond motorists are filling up their thirsty tanks for far less compared to last year,”said Martha Mitchell Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “The savings are significant as drivers are saving anywhere from $15-$40 per fill-up, depending upon the size of their vehicle’s gas tank.”

The average price at the pump is likely to remain below $3.00 per gallon in 2015, as long as the price of crude oil does not significantly fluctuate upward.  Gas prices may see seasonal increases this spring as refineries undergo maintenance, or this summer as demand increases during the busy summer driving season, but those higher prices should be much less than in recent years.

The nationwide average price for a gallon of gas today is $2.15 per gallon, which is seven cents lower compared to a week ago, 49cents drop from last month, and $1.16 decline versus the price at this time a year ago.  The national average has declined for a record 107 days.

The price of crude is continuing its downward slide due to a glut of supply and weak demand, and closed below $50 per barrel on January 6, 2015, for the first time since April 2009. Global oil prices are expected to remain relatively low for the first half of 2015, which could put additional pressure on high-cost production countries like the United States. Rebel forces continue to disrupt supply from OPEC member country Libya, yet the level of global oversupply appears capable of easing concerns that might otherwise send prices higher due to production concerns.

Sustained low prices for crude have the potential to impact domestic production.   Although it is too early to tell what, if any, impact low crude prices will have on domestic production.  It is worth noting that companies will increasingly face the choice of either continuing expansion plans or cutting capital expenditures in a market that offers significantly lower profit margins.

The global price of crude has lost more than half of its value since mid-2014. At the close of formal trading yesterday, WTI (West Texas Intermediate) closed down 43 cents per barrel and settled at $48.36.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)