AAA: Supply continues to outpace demand, benefits motorists
Over the weekend Hurricane Delta made landfall in southwestern Louisiana as a category 2 hurricane.
While the storm caused some disruptions, refineries are reporting operations have resumed.
The Colonial Pipeline Line 1, the main gas line, was down temporarily over the weekend due to loss of power, which has since been restored as well as service. Line 2, the distillates line, is currently shutdown without power.
While the Bureau of Safety and Environmental Enforcement reports that approximately 91% of oil production in the Gulf of Mexico is currently shut-in, as of this morning, inspections are underway and production is expected to resume this week.
“In a typical year, a hurricane season like we’ve experienced this year would have caused gas prices to spike, but 2020 is not a typical year,” said Jeanette Casselano McGee, AAA spokesperson. “Low U.S. gasoline demand has helped contain any impact to gas prices locally and regionally throughout this hurricane season.”
On the week, the national gas price average held steady at $2.18 despite a slight jump in demand. At 8.8 million b/d, gasoline demand is just 6% below levels last year at this time. However, the increase isn’t substantial enough to impact supply levels or pump prices. The Energy Information Administration’s (EIA) weekly report measures gasoline supply at 226.7 million bbl. That is a decrease of 1.7 million bbl from the week prior, though the drop is likely attributed to high export numbers.
“The vast majority of motorists are seeing stability at the pump, even despite Hurricane Delta. On the week 45 state gas price averages only fluctuated by one or two pennies, if at all. Demand just is not strong enough to outpace supply, which means drivers are continuing to benefit from cheaper prices at the pump,” added McGee.
Today, motorists can find gas for $2.25 or cheaper at 72% of gas stations, compared to 12% last October. The national average is a penny less than last month and 45 cents cheaper than last year.
- The nation’s top 10 largest weekly changes: Delaware (+9 cents), Washington, D.C. (+6 cents), Maryland (+6 cents), Indiana (+5 cents), South Carolina (+3 cents), Ohio (-3 cents), Wisconsin (-3 cents), Illinois (-3 cents), Florida (-2 cents) and Idaho (-2 cents).
- The nation’s top 10 least expensive markets: Mississippi ($1.85), Texas ($1.85), Missouri ($1.87), Oklahoma ($1.87), Arkansas ($1.88), Louisiana ($1.90), Alabama ($1.90), South Carolina ($1.94), Tennessee ($1.94) and Kansas ($1.95).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI decreased by 59 cents to settle at $40.60. Crude prices dropped due to market concern about increasing coronavirus infections worldwide, which could lower crude demand. The drop in prices occurred alongside the EIA weekly report revealing that total domestic crude inventories increased by 500,000 bbl to 492.9 million bbl. For this week, crude prices could decline further if demand concerns continue to worry the market.
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.