Pump Prices Packing Punch to Motorists, but Show Signs of Tapering Off

Monday, May 7, 2018 - At $2.81, the national gas price average is 45 cents more expensive than a year ago. With the unofficial kick-off to summer just weeks away, prices are expected to increase, but a tapering trend may be emerging.

“If this past week’s moderate increases are any indicator of what’s to come, the fast rate at which gas prices were increasing may be slowing down,” said Marilyn Buskohl, AAA spokesperson. “On the week, the national average held steady and 19 state averages remained flat or saw decreases in gas prices. Despite this stability, drivers on the West Coast and in Idaho, Utah and Pennsylvania are paying $3/gallon.” 

South Dakota Average Gas Prices:

Quick Stats

• The nation’s top 10 most expensive markets are: California ($3.63), Hawaii ($3.63), Washington ($3.32), Alaska ($3.28), Nevada ($3.25), Oregon ($3.23), Idaho ($3.11), Utah ($3.09), Pennsylvania ($3.02) and Connecticut ($2.98).
• The nation’s top 10 states with the largest yearly increases are: Indiana (+66 cents), California (+66 cents), Utah (+63 cents), Arizona (+60 cents), Hawaii (+56 cents), Idaho (+55 cents), Nevada (+55 cents), Illinois (+52 cents), New Jersey (+51 cents) and Michigan (+51 cents).

Great Lakes and Central

A few of the states in this region — Ohio (-8 cents), Michigan (-7 cents) and Kentucky (-5 cents) — land on this week’s top 10 states with the biggest decreases in pump prices. However, the majority of states in the Great Lakes and Central region saw increases: Indiana (+6 cents), Wisconsin (+4 cents), Illinois (+2 cents), Kansas (+2 cents) and Minnesota (+2 cents). 

This week, motorists in Indiana (+66 cents) have the largest year-over-year gas price difference in the country. Illinois (+52 cents) and Michigan (+51 cents) join Indiana on the top 10 list of states with the highest year over year increase. South Dakota (+31 cents) ranks as the state with the smallest year-over-year difference in the country and the region below Minnesota (+36 cents) and North Dakota (+35 cents).

Gasoline inventories in the Great Lakes and Central states have declined steadily for eight weeks. With the latest draw of 340,000 bbl, total inventories sit at 56.2 million bbl, which are on par with levels in April 2017. 

Oil market dynamics

At the close of Friday’s formal trading session on the NYMEX, WTI increased $1.29 cents to settle at $69.72 – a new high for the year. Oil prices ticked up higher last week following reports that President Trump will potentially decline to recertify the Iran nuclear deal on May 12 and may impose new sanctions on the country. Iranian Foreign Minister Mohammad Javad Zarif respondedthat the country is unwilling to renegotiate the deal it set with the U.S. in 2015 under the Obama Administration. The decision to not recertify the deal could increase tensions in the volatile region, leading to global supply disruptions. Crude prices are likely to continue climbing as the May 12 deadline for the recertifying draws near and it becomes increasingly likely that the U.S. will decline to renew it.

Additionally, EIA’s weekly petroleum status report noted that U.S. crude production hit another record high at 10.62 million b/d. The growth in production occurred alongside growth in crude inventories, which grew by 6.2 million bbl last week. At 436 million bbl, inventories are nearly 92 million bbl lower than they were at this time last year.

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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