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Have Gas Prices Peaked?
National Average Sees Largest Weekly Decline in Three Months
After topping $3 for the first time in six months, Connecticut gas prices have reversed course, dipping below $3 again over the weekend.
“The big question, of course, is whether or not gas prices have peaked for the season,” says Amy Parmenter, spokesperson for AAA in Greater Hartford. “While that is a possibility, it’s unlikely, given that we still have a week or two for demand to ramp up as we approach the busy summer driving season”.
While gas prices nationwide have been declining in recent days, the average price of gas tends to peak towards the end of May or early June so it would not be unusual to see pump prices increase again before leveling off for the summer.
The average price of gas nationwide today is $2.86, down three cents on the week and four cents cheaper than a month ago – but the same price as a year ago on this same date.
Here in Connecticut, the average price of gas today is just under $3 ($2.996). That is still 20 cents higher than a month ago but just four cents above the same date last year.
As usual, gas prices vary by region:
Bridgeport - $3.07
Hartford - $2.97$
New Haven/Meriden - $2.97
New London/Norwich - $3.02
Gas prices are decreasing despite the Energy Information Administration’s (EIA) latest reports which show an increase in demand to summer-like levels and a decrease in gasoline stocks. The move to cheaper gas prices indicates that demand and supply are potentially leveling out.
Mid-Atlantic and Northeast
All states in the Mid-Atlantic and Northeast region have cheaper, if not the same, gas prices as this time last year. Motorists in Delaware ($2.69) are seeing the most significant savings with the average being 16 cents cheaper year-over-year. This is the exception as most state’s averages are only as much as a nickel less to fill-up on the year.
On the week, all states are paying less at the pump with prices as much as six cents cheaper than last Monday. Pennsylvania ($3.02) carries the most expensive and Tennessee ($2.57) carries the least expensive in the region.
With a nearly 1.1 million bbl build, gasoline stock levels for the region measure at the 60.6 million bbl mark. EIA data reports this is the highest level since the end of March. The build, which was due in part to imports, helped to stabilize prices in the region on the week as regional refinery utilization plummeted from 92.5 to 83.9%. Refinery reports show that unplanned and planned maintenance is wrapping up, which should help to push utilization back up in coming weeks.
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI decreased four cents to settle at $61.66. On the week, crude prices have moved lower because of global concerns around trade negotiations between the U.S. and China. This plus reports that two Saudi oil tankers were attacked in the Strait of Hormuz are likely to keep prices volatile this week. In related news, this week’s EIA petroleum status report revealed that crude stocks fell by 4 million bbl to 466.6 million bbl last week. While the new level is 32.8 million bbl lower than the level at this time in spring 2018, the step back is a reversal from the previous week that saw crude inventories climb by 10 million bbl. Contributing to the recent reduction in total domestic crude inventories was a slight reduction in domestic crude production to 12.2 million b/d and a drop in crude imports from 7.4 million b/d to 6.7 million b/d. The reduction in crude inventories occurred despite crude exports falling last week from 2.6 million b/d to 2.3 million b/d. In related news, Baker Hughes, Inc. reported that the U.S. lost two oil rigs last week, bringing the country’s total to 805. When compared to this time in 2018, there are 39 fewer rigs now.
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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AAA provides automotive, travel and insurance services to 58 million members nationwide and more than one million members in Connecticut. AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years. The not-for-profit, fully tax-paying member organization works 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.