Winter lull comes early as gas prices continue to drop
LEXINGTON, Ky. – Gasoline demand may be entering the winter lull sooner than expected. The drop in demand has helped to push prices lower just in time for the Thanksgiving holiday, following an unusual spike in pump prices seen last month due to increased crude prices.
Kentucky’s average gas price has plummeted to $2.47, dropping another 9 cents from last week and placing it on the leader board for one of the largest week-over-week decreases in the nation. State gas price averages are as much as 12-cents to a nickel cheaper per gallon on the week in more than two-thirds of the country.
As demand drops and the end of refinery maintenance season wraps-up, the national gas price average is $2.70. That price is six cents less than last Monday, 21 cents less than last month and just 14 cents more than last year. In fact, the year-over-year price differential has not been this small since early January.
“Prices could plunge even lower, especially if we see a surge in gasoline production after refiners fully restart units from the fall maintenance season,” said Lori Weaver Hawkins, AAA Blue Grass manager of public and government affairs. “Also driving down pump prices is the fact that crude oil is selling under $65/bbl, a rare sight this year. After enduring unusually high gas prices this fall, this is great news for Kentuckians looking ahead to Thanksgiving holiday travel.”
Winter’s lower prices come early across the nation
Today, 41 percent of gas stations nationwide are selling unleaded gasoline for $2.50 or less. In comparison, the majority of gas stations were selling gas for $2.51 or more at the start of summer during the Memorial Day holiday weekend.
The nation’s top 10 least expensive markets are: Delaware ($2.35), Missouri ($2.37), Oklahoma ($2.39), South Carolina ($2.40), Ohio ($2.40), Texas ($2.40), Louisiana ($2.42), Alabama ($2.43), Mississippi ($2.44) and Arkansas ($2.45).
The nation’s top 10 largest weekly decreases: Ohio (-12 cents), Michigan (-11 cents), Nebraska (-10 cents), Iowa (-10 cents), Indiana (-9 cents), Kansas (-9 cents), Delaware (-9 cents), Missouri (-9 cents), Kentucky (-9 cents) and Oklahoma (-9 cents).
Gas prices dropping across all of the commonwealth
Gas prices dropped week over week across the Commonwealth, with an average decline of -9 cents, enabling Kentucky to tie for the fourth greatest drop in prices week over week in the nation.
The largest declines from last week were seen in Huntington/Ashland (KY only) (-17 cents), Covington (-14 cents), Elizabethtown/Fort Knox (-12), Bowling Green (-10) and Louisville (-10).
Gas prices in Lexington are now averaging $2.37, having dropped 41 cents in the past month, including 7 cents in the past week.
Central U.S. sees some of the greatest decreases
Gas prices in eight Great Lakes and Central states, including Kentucky, land on the top 10 list of states with the biggest changes, some posting double-digit drops: Ohio (-12 cents), Michigan (-11 cents), Nebraska (-10 cents), Iowa (-10 cents), Indiana (-9 cents), Kansas (-9 cents), Missouri (-9 cents) and Kentucky (-9 cents). Gas prices are, at a minimum, a nickel cheaper in every state in the region on the week.
Despite recent declines, only six states in the country have cheaper gas prices today as compared to a year ago. Five are Great Lakes and Central states: Illinois ($2.68), Michigan ($2.60), Indiana ($2.52), Iowa ($2.53) and Ohio ($2.40). With gas prices just pennies more than last year, these three states also might see the same trend soon: Missouri ($2.37), Nebraska ($2.58) and Wisconsin ($2.61).
The region saw a small draw of 856,000 bbl on the week, tightening gasoline stocks to a new low for the year. The last time the region saw stocks register at the 46 million bbl mark was during October 2017, according to Energy Information Administration (EIA) data. As refineries wrap-up maintenance season, it is likely stocks will increase and drive prices potentially even cheaper amid declining demand.
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI decreased 48 cents to settle at $60.19. Oil prices drifted lower this week, following the release of EIA’s report that total domestic oil inventories grew by 5.8 million barrels last week. They now sit at 431.8 million barrels, which is 25.3 million barrels less than inventories last year at this time.
Crude inventories have grown for seven consecutive weeks because of reduced refinery runs while the nation settles into the lower demand fall driving season. A new all-time high estimate in domestic crude production since EIA began publishing the data – 11.6 million barrels/day – also contributed to last week’s build in crude inventories. Moving into this week, crude prices may drop further if supply concerns remain reduced due to continued growth in inventories.
AAA offers these tips to motorists to save at the pump as they prepare for Thanksgiving travel:
• If your vehicle’s engine does not require premium or mid-grade fuel, don’t buy it. Using anything other than regular grade is simply a waste of money.
• Don’t top off your gas tank. Stop filling after the automatic nozzle shuts off the second time.
• If you have to replace a gas cap, make sure it is the right one for your car. An ill-fitting cap will increase emissions and trigger the “check engine” light.
• Keep track of gas mileage. If you notice a sudden decrease in fuel economy, have your vehicle checked by a technician to ensure it is operating properly.
• Check for proper tire pressure, which can fluctuate greatly with changing temperatures.
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.
AAA provides automotive, travel and insurance services to 57 million members nationwide and more than 600,000 members in Kentucky. AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years. The not-for-profit, fully tax-paying member organization works 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 for iPhone, iPad and Android. For more information, visit www.aaa.com.