National Average Back to $2/Gallon
June 8, 2020 - For 66 days, the national gas price average held below the $2/gallon mark, pushing as cheap as $1.76. In the past week, the average has inched up to $2.03. Despite the consistent increases at the pump, prices are still significantly cheaper year-over-year. In fact, during the first week of June the past five years, gas prices have typically averaged $2.81.
“The beginning of June has not seen gas prices this low since 2004,” said Marilyn Buskohl, AAA spokesperson. “As crude oil prices trend higher and gasoline demand increases, Americans will see gas prices push more expensive, but this summer will be cheaper than last.”
U.S. gasoline demand continues to show increasing strength. The Energy Information Administration’s (EIA) latest reading shows a 4% weekly increase at 7.5 million b/d. That is the highest demand level since states began issuing stay-at-home orders in mid-March.
Central States and Great Lakes Region
Indiana (+12 cents), Missouri (+11 cents), Kentucky (+10 cents) and Kansas (+9 cents) saw the largest pump price increases in the Great Lakes and Central states region. They also land on the top 10 list for largest weekly increases in the country. All other states in the region saw increases, but they were only 2 to 4 cents.
Illinois ($2.29) ranks as the 7th most expensive state average in the country and the highest in the region. On the other end of the spectrum, Missouri ($1.76) and Kansas ($1.77) rank as the 8th and 9th least expensive averages, respectively.
Gasoline stocks in the region drew by about 600,000 bbl to push total stocks down to 54.4 million bbl, according to EIA data. The small draw, combined with mostly steady refinery rates, will likely help to keep any price increases in the week ahead minimal.
Oil Market Dynamics
At the end of Friday’s formal trading session, WTI increased by $2.14 to settle at $39.55 per barrel. At the end of last week, crude prices increased amid market optimism that the Organization of the Petroleum Exporting Countries (OPEC) and other major crude exporters, including Russia, would extend their 9.7 million b/d production reduction agreement for May and June 2020 into July.
Additionally, approximately one third of crude oil and natural gas production in the Gulf of Mexico has been halted, as Tropical Depression Cristobal makes landfall in Louisiana. The storm is expected to bring tropical-storm force winds and potential storm surge and flooding to the state’s coastal areas. There is no estimate for when the facilities will resume operations. Facilities will likely be inspected after the storm has passed to determine if personnel can return safely. Any impact on domestic crude prices will depend on how long production remains shuttered and the extent of damage caused by the storm.
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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