With the busy summer driving season behind us, drivers are beginning to see some relief at the pump, as the national gas price average dropped by a penny on the week to $3.17.
However, recovery from Hurricane Ida, more storms in the forecast and falling gasoline stock levels could slow the downward trend that is typical through the fall.
Recovery from Ida remains slow, with the latest U.S. data showing just under half of the U.S. offshore oil production in the Gulf still idle after companies shuttered production ahead of the storm.
The constraint on stocks would typically lead to higher prices, but it has been offset by decreased demand going into the fall.
“Timing is everything, and while supplies have tightened due to the slow recovery after Hurricane Ida, this is also the point when gas demand starts its seasonal decline,” said Morgan Dean, AAA spokesperson. “While there may be some price fluctuation, we expect most drivers to see stability at the pump.”
In the week ahead, pump prices may be impacted by Tropical Storm Nicholas, which is expected to bring heavy rains and a storm surge to the Texas coast this week. If the tropical storm puts additional refineries offline, we are likely to see prices pushed higher.
According to the Energy Information Administration, gasoline stock levels have fallen by 7.2 million bbl to 220 million bbl and they are expected to remain tight until Ida-affected refineries resume normal operations. While refineries are reporting progress towards restarting, the U.S. Department of Energy said it would release an additional 1.5 million bbl of crude oil held at the U.S. Strategic Petroleum Reserve to help ease tightened supplies. This is the second such release, and the DOE said the SPR has now released a total of 3.3 million bbl of crude oil in response to the storm.
Today’s national average of $3.17 is a penny less than a month ago but is 98 cents more than a year ago. Virginia’s average ($2.97) is the same as a week ago and a month ago, but up 88 cents from this day in 2020.
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