CINCINNATI – The national gas price average has steadily declined for seven weeks, pushing the average cheaper to $1.84 today. During this time frame (since late February), U.S. demand for gasoline has decreased 44% to 5 million b/d as gasoline inventories build across the country.
“We are seeing fast and furious gasoline demand destruction. The latest data reveals demand levels not seen since spring of 1968,” said Jenifer Moore, AAA spokeswoman. “Every U.S. region is seeing builds in gasoline inventories and crude storage, which is just driving pump prices even cheaper.”
Pump prices in Ohio are $1.45 per gallon landing the state on AAA’s list of Top 10 Least Expensive Markets for gas. Prices are 7-cents cheaper on the week, 54-cents cheaper on the month and $1.23 less than a year ago. Regional gasoline stocks measure at 60.5 million bbl – the highest levels in 14 months. The Energy Information Administration (EIA) reports for the week ending April 3, stocks built by 2.6 million bbl.
Gas prices will continue to push cheaper in the week ahead even with a number of regional refiners announcing cuts to combat declining demand.
On Sunday, the Organization of the Petroleum Exporting Countries plus (OPEC+), led by Saudi Arabia, announced historic global crude productions cuts – nearly 10 million b/d in May and June.
“While the production cut is historic, it’s likely to not have an immediate impact on pump prices given the ongoing impact the COVID-19 pandemic continues to have on crude oil prices and gasoline demand,” added Moore.
At the end of Thursday’s formal trading session, WTI decreased by $2.33 to settle at $22.76 per barrel. Crude prices were volatile last week, during the run-up to OPEC’s historic agreement with its allies, including Russia. The group met to discuss global crude productions cuts of up to 9.7 million b/d for May and June 2020.
Under the new production reduction agreement, OPEC and its allies expect total global oil cuts to amount to more than 20 million b/d or 20 percent of global supply. Effective May 1, the production cuts are expected to ease in June, but some restrictions will remain in place through April 2022.
Crude prices will likely remain volatile this week, as the market assesses if the production cuts are sufficient to hold back growing global crude inventories as COVID-19 continues to push down demand.
AAA provides automotive, travel, and insurance services to 60 million members nationwide and nearly 2.5 million members in Ohio. AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years.
AAA is a non-stock, non-profit corporation working 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 (AAA.com/mobile) for iPhone, iPad and Android.
For more information, visit www.AAA.com.