Americans looking for relief somewhere finally saw some Monday as gas prices fell 4.2 cents per gallon on average to $4.97 a gallon. The prices set a new high, surpassing $5 per gallon last week.
While the prices are down a bit for the first time in months, the national average still sits near record highs and is up 37.3 cents compared to a month ago and nearly $2 more than a year ago. The big question is: will it continue to fall?
“Finally some relief! For the first time in nine weeks, gasoline prices have fallen, following a broad sell-off in oil markets last week, pushing the national average back under the $5 level with most states seeing relief at the pump,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
“I’m hopeful the trend may continue this week, especially as concerns appear to be mounting that we may be on the cusp of an economic slowdown, putting downward pressure on oil. But the coast isn’t yet entirely clear. We could see the national average fall another 15 to 30 cents, if we’re lucky, by the time fireworks are flying, barring any unexpected shutdowns at a time when the market is extremely sensitive to such.”
AAA posted an average price that was just a touch higher at $4.98 per gallon. There is typically a 1-cent difference between the two services.
Factors in the decline
Oil prices were volatile with prices down between $8 and $10 a barrel depending upon the type of oil. After the Federal Reserve increased interest rates last week, oil then began selling off later in the week due to concerns about an economic slowdown intensifying.
According to data from the Energy Information Administration, U.S. crude oil inventories rose by 2 million barrels, while the U.S. strategic petroleum reserve fell nearly 8 million barrels as the Biden administration continues to try to offset market factors. Oil inventories now stand 10% below last year and 14% below the five year average for this time of year.
Gasoline inventories fell by 700,000 barrels and stand nearly 11% below a year ago and the five-year average for this time of year. Despite more oil being available, refinery utilization fell half a percentage point to 93.7%, while gasoline production fell slightly to 10 million barrels per day and distillate production fell to 4.9 million barrels per day. Total U.S. supplies are down 9.2% or 118 million barrels from a year ago.
What we are paying and where
The most common U.S. gas price encountered by motorists stood at $4.99 per gallon, unchanged from last week, followed by $4.79, $4.69, $4.59 and $4.89 rounding out the top five most common prices, GasBuddy.com noted.
The median U.S. price is $4.85 per gallon, down 4 cents from last week and about 12 cents lower than the national average.
The top 10% of stations in the country average $6.15/gal, while the bottom 10% average $4.38/gal.
The states with the lowest average prices: Georgia ($4.46), Mississippi ($4.47), and Arkansas ($4.50).
The states with the highest prices: California ($6.38), Nevada ($5.62), and Alaska ($5.59).