August 26, 2020

Gas Prices Tip-Toe Lower, But Demand Rallies to Highest in Months

The national average price of gasoline has sagged to its lowest level since June, falling 1.2 cents per gallon over the last week to $2.16 according to GasBuddy data compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country. The national average price of diesel has decreased 0.4 cents and stands at $2.41 per gallon over the same period.

“For the seventh straight week and now some 53 days, the national average price of gasoline has stayed in a range of less than a nickel, an incredible feat for the summer driving season, and a level of summer stability we haven’t seen in decades,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “However, with new data from the Pay with GasBuddy payments card showing weekly demand last week rose to a fresh coronavirus high, we may see some upside in oil prices propelled by the good news that demand is solidly moving higher again. Should demand continue to rebound, its only natural that with less oil on global markets, prices are likely to drift to the upside if the situation continues to improve.”

The price of oil remains confined to a range of $40-$42 per barrel as pessimism and optimism remain bound in a tug-of-war with neither side being able to break the stalemate for now. However, according to Pay with GasBuddy data, gasoline demand rose 2.15% in the last week to its highest COVID-19 level and as new coronavirus cases continue to decline from July highs. In early trade Monday morning, a barrel of West Texas Intermediate crude oil stood at $42.06, up from $41.22 a week ago. Brent crude oil remained pricier, at $44.75 early Monday, down slightly from last week’s $44.78 level.

Government data last week showed a broad decline in petroleum inventories, with crude oil supplies falling 4.5 million barrels. They remain some 16.7% above year-ago levels, or nearly 74 million barrels higher. Gasoline inventories fell gently, posting a 700,000 barrel decline and stand 5.7% higher than a year ago. Distillate inventories fell 2.3 million barrels, but remained 31.1% above last year. Refinery utilization technically rose 1.4% last week, due to the EIA’s removal of the long shuttered PES refinery in Philadelphia from calculations. Without the removal, the utilization rate would have stayed the same.

At gas pumps across the country, average state prices mostly tip-toed lower. The most common U.S. gas price encountered by motorists fell to $1.99 per gallon, down 10 cents from last week, followed by $1.89, $2.09 and $2.19. The average cost at the priciest 10% of stations stands at $3.12 per gallon, up 8 cents from a week ago, while the lowest 10% average $1.73 per gallon, up 4 cents from a week ago. The median U.S. price fell 3 cents to $2.06 per gallon, about 10 cents lower than the national average. The states with the lowest average prices: Louisiana ($1.81), Mississippi ($1.81) and Arkansas ($1.84), while the highest priced states were California ($3.18), Hawaii ($3.11) and Washington ($2.78).

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