The New Year has ushered in the cheapest national gas price average in three years. To boot, at $2.25 today’s national average is even one cent cheaper than on Jan. 1.
Trends indicate that pump prices will likely remain cheap for at least the first half of the month.
Today, 29 state gas price averages are at or below the national average of $2.25 with Missouri touting the cheapest at $1.83. Hawaii ($3.34) carries the most expensive average.
“With OPEC production cuts slated to take effect this week, analysts will closely be watching the price of oil,” said Tammy Arnette, AAA spokesperson. “Significant movement toward higher market prices would mean cheaper gas prices could be in the rear-view mirror. However, AAA expects to see minimal volatility at the start of the cartel’s production cuts.”
The end of 2018 drove WTI crude oil prices to as low as $44/bbl, which is a steep $31 drop from the high of $77/bbl seen during June.
All Mid-Atlantic and Northeast states have cheaper gas prices compared to the beginning of 2018. Delaware has the largest year-over-year savings of 34 cents.
This week, state gas price averages in the region range from $2.61 to $1.99. New York touts the highest average while Tennessee lays claim to the cheapest. On the week, motorists saw pump prices decline between two and five cents.
On the week, stock levels held flat at 60 million bbl as did regional refinery utilization (83 percent).
At the close of Wednesday’s formal trading session on the NYMEX, WTI increased $1.13 to settle at $46.54. Oil prices mostly fell last week, as market observers continue to believe that the global crude market is over-supplied. Moreover, new concerns are growing of a potential economic slowdown in 2019 that could lead to a decline in global demand for crude. However, recent price gains in the market underscore how volatile the market is now, which could lead crude prices higher if global supply tightens amid robust demand for crude. For now, new reports indicate that the U.S., Russia and Iraq, the second largest producer in the Organization of the Petroleum Exporting Countries (OPEC), saw crude production and export increases in the final months of 2018, contributing to the falling price of crude.
In related news, according to the latest weekly petroleum status report from the EIA, total domestic crude inventories took a slight step back during the week of December 21. But even with a decline of approximately 40,000, at 441.4 million bbl, domestic crude inventories are approximately 10 million bbl higher when compared to a year ago. In the coming weeks, market observers will look for indications that OPEC’s global pact with large non-OPEC crude producers (including Russia) to reduce crude production by 1.2 million b/d for at least the first six months of 2019 will help reduce the growing global glut of crude. In turn, this could drive up crude oil prices and, subsequently, gas prices.
Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.
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