(WASHINGTON, September 8, 2015) The 2015 summer driving season ended with the national average at its lowest point for the Labor Day holiday in more than a decade. Motorists paid an average price of $2.40 per gallon at the pump yesterday, a savings of $1.04 per gallon in comparison to last year’s holiday. The national average price for regular unleaded gasoline has fallen 22 consecutive days for a total of 28 cents per gallon, reaching today’s average of $2.39 per gallon. Drivers are saving seven cents per gallon versus one week ago and 20 cents versus one month ago. Yearly price comparisons continue to reflect savings of more than $1 per gallon, with today’s price discounted by $1.05 versus this same date last year.
Motorists have enjoyed lower prices at the pump throughout this summer, with an average savings of 89 cents per gallon compared to last year’s summer driving season, which typically runs from Memorial Day to Labor Day. These lower prices have encouraged motorists to hit the road in record numbers and meant some of highest demand numbers over the first eight months of 2015. Prices are expected to continue to slide as driving demand experiences a seasonal decrease heading into the fall, provided the price of crude remains relatively low and refineries are able to conduct routine maintenance without issues. According to the U.S Energy Information Administration, refineries reported higher than normal utilization rates and more maintenance is scheduled for this year compared to previous years. This could slow the rate of anticipated declines in the price at the pump; however, it is not expected to cause a reversal of direction.
The conclusion of the summer driving season also signals the start of the seasonal switchover to winter-blend gasoline in many parts of the country on September 16. The Environmental Protection Agency requires certain areas to use a specified blend of gasoline, commonly referred to as summer-blend gasoline, in order to address air quality issues during the summer months. This more expensive summer-blend gasoline is not required during the winter months and prices tend to fall following the completion of this seasonal switchover.
The highest retail averages are found in states west of the Rockies, and drivers in Alaska ($3.35) are paying the most per gallon at the pump. A total of four states are posting averages above $3 per gallon, and regional neighbors California ($3.26), Nevada ($3.10), Hawaii ($3.03), and Washington ($2.88) round out the top five most expensive markets for gasoline. Pump prices slipped below $2 per gallon in South Carolina, the nation’s least expensive market for gasoline, over the weekend and drivers are currently paying an average price of $1.97 per gallon.
With the exception of Delaware (+4 cents) and Utah (fractions of a penny), retail averages are down in every state and Washington, D.C. week-over-week. Weekly price comparisons reveal that motorists in more than half of the country (26 states) are saving a nickel or more per gallon at the pump and prices are discounted by double-digits in five states. The largest savings over this same period are seen in states previously impacted by the Whiting, Indiana refinery outage and where prices are now falling as production at the facility has restarted: Indiana (-17 cents), Ohio (-15 cents), Illinois (-14 cents) and Michigan (-12 cents).
Consumers nationwide are paying less per gallon to refuel their vehicles versus one month ago. Retail averages are down by a dime or more per gallon in 43 states and Washington, D.C. over this same period, and motorists in eight states are saving a quarter or more per gallon at the pump. The most significant monthly discounts in price are seen in California (-33 cents), Oregon (-29 cents) and New Jersey (-27 cents).
Prices remain markedly lower year-over-year in every state, and averages are discounted by at least 75 cents per gallon in 47 states and Washington, D.C. Market leaders Alaska (-67 cents), California (-56 cents) and Nevada (-59 cents) are the only states to buck this trend. Pump prices are discounted by $1 or more per gallon in 33 states, with the largest savings over this same period reflected in the Midwestern states of Indiana (-$1.28), Michigan (-$1.26) and Ohio (-$1.26).
While prices have been volatile in recent weeks, a long-term bearish sentiment continues to underscore the global oil market as speculation about the balance between supply and demand from emerging economies remain front of mind. A small group of oil ministers from both OPEC member countries and non-OPEC member counties located in the Persian Gulf are scheduled to meet this week, and although oil prices are not officially on the agenda, the market will closely monitor developments for any clues about OPEC’s plans for production.
The domestic oil market has been described as bullish in recent trading sessions, after posting gains upwards of 20 percent following a multi-year low of $38.60 per barrel (August 26). Despite this recent jump, the price of WTI is likely to face downward pressure due to seasonal declines in demand and reduced crude oil purchases by refineries, both capable of further exacerbating the imbalance between supply and demand.
WTI opened today’s trading session down approximately 60 cents per barrel, after closing Friday’s formal trading session on the NYMEX down 70 cents, settling at $46.05 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. Learn more at AAA.com/mobile.
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