CINCINNATI – The national gas price average is cheaper on the week (-6 cents), month (-7 cents) and year (-11 cents) – giving the vast majority of motorists savings at the pump. At $2.36, the national gas price average has not been this cheap since last February.
“For the third week, U.S. gasoline stocks decreased while demand increased. Generally, growing demand amid declining stocks causes increases at the pump, but crude oil prices have dipped to four-year lows, signaling spring could be cheaper at the pump,” said Jenifer Moore, AAA spokesperson.
When the global markets opened on Sunday evening, West Texas Intermediate (WTI) crude oil prices dipped below $30/bbl for the first time since 2016. The market plunge is in response to a lack of agreement between Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries to cut production.
The trend of pump prices facing downward pressure is likely to continue through the end of the winter driving season if crude remains cheap, especially amid concerns about the coronavirus.
All Great Lakes and Central states have cheaper gas prices on the week, month and year except for Missouri and Kentucky. On the week, gas prices are cheaper across the entire region by as much as 12 cents.
With a 1 million bbl build, stock levels bump up to 60 million bbl for the region. This increase helped to push gas prices cheaper on the week. Given the lower price of crude oil, prices are likely to push cheaper in the week ahead.
At the close of Friday’s formal trading session on the NYMEX, WTI decreased by $4.62 to settle at $41.28. Crude prices plunged at the end of last week after OPEC and other major crude producers, including Russia, failed to set a new production reduction agreement amid mounting global crude demand concerns caused by COVID-19.
The rapid decline in crude prices has increased market concerns that an oil price war may breakout this week between major crude producers, contributing to further economic troubles worldwide as crude prices continue to drop dramatically.
Moreover, the market continues to worry that the impact of COVID-19 will lead to a reduction in global economic growth and global travel, with crude demand expected to decrease. Until it appears that the international public health threat from the virus decreases, crude prices are likely to continue facing significant downward pressure.
AAA is the most comprehensive resource for gas prices. AAA reports reflect actual prices from credit card transactions at more than 100,000 gas stations in the U.S. Check the latest gas prices anytime by visiting the AAA Gas Prices site.