Due to the Thanksgiving holiday, the next edition of Hotwire will be out on Nov. 30. AAA predicts 46.9 million Americans will journey 50 or more miles from home during the holiday. They will pay the lowest pump prices for the holiday since 2008. Just how far will gas prices drop?
Here are the gasoline price highlights from AAA:
* Retail averages have fallen for 17 consecutive days for a total savings of 15 cents per gallon, and the national average remains poised to fall below the $2 per gallon benchmark by the Christmas holiday.
*Already, more than half of U.S. stations are selling gas for less than $2 per gallon.
* Today’s national average price of $2.07 per gallon represents a savings of nine cents per gallon versus one week ago, and 14 cents per gallon on the month.
* Significant yearly savings persist and pump prices are down 75 cents per gallon compared to this same date last year.
Gasoline prices continue to drop -- a lot
AAA notes that Midwestern refineries continue to come back online following both planned and unplanned maintenance work. According to the U.S. Energy Information Administration, production in the region reached its highest rates in nearly two months, which has also helped gas prices recover in the region following recent spikes due to unexpected outages.
As a result of more supply entering the regional market, the largest weekly and monthly declines in the price at the pump are localized to this region. The AAA says drivers in Wisconsin, Michigan, Illinois, and Indiana are benefitting from noticeable savings in the price of retail gasoline.
Demand for gasoline typically declines during the month of November, and barring any unexpected disruptions in supply, the national average is expected to move lower leading into 2016, according to the AAA.
AAA reports that list of states with retail averages below $2 per gallon has added seven new members since one week ago, for a total of 18 states. Pump prices have moved markedly lower in the Midwest week-over-week, and Indiana ($1.82), Ohio ($1.83) and Oklahoma ($1.85) edged out Alabama ($1.85) and South Carolina ($1.85) as the nation’s least expensive markets for gasoline.
Hawaii ($2.83) is the market leader, where drivers are paying more than $1 per gallon more than the nation’s least expensive market Indiana. Regional neighbors California ($2.73), Nevada ($2.59), Washington ($2.48) and Alaska ($2.40) join Hawaii in the rankings as the top five most expensive markets
With the exception of Alaska (+2 cents), drivers nationwide are enjoying weekly discounts in the price to refuel their vehicles. Averages in the majority (36) of states are down a nickel or more per gallon, and consumers in a dozen states have seen prices fall double-digits from one week ago. The largest savings over this same period are in the Midwestern states of Wisconsin (-24 cents), Michigan (-23 cents), Indiana (-20 cents) and Ohio (-18 cents).
Will low prices last?
The AAA says crude oil supply from a number of production countries including Russia and Saudi Arabia is expected to sustain the global oil market’s current oversupply and keep market fundamentals bearish in the near term. Projections of slower than expected economic growth from China, combined with the impact of a strengthening U.S. dollar, are also likely to keep the market out of balance and put a ceiling on global oil prices. When the value of the U.S. dollar increases, West Texas Intermediate crude oil, priced in U.S. dollars, becomes a relatively less attractive investment for those holding currencies overseas.
The latest data from the U.S. Energy Information Administration points to crude oil inventories being up more than 100 million barrels from this time last year, according to the AAA. Domestic inventories are nearing all-time record levels, which contributed to WTI falling temporarily below $40 per barrel last week. WTI closed out Friday’s formal trading session on the NYMEX down 15 cents settling at $40.39 per barrel.
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. For more information, visit AAA.com/mobile.
MTD wishes all a wonderful holiday and safe travels.
