Friday, 07 December 2018 20:14

Growing Global Crude Supply Outpaces Demand, Driving December Pump Prices to Cheapest of the Year

Growing Global Crude Supply Outpaces Demand, Driving December Pump Prices to Cheapest of the Year

WASHINGTON (December 7, 2018) – At $2.44 the national gas price average has set a new record low for 2018. This is nearly a nickel less than this time last December. AAA expects the national gas price average to fluctuate through the end of the month and possibly end the year as cheap as $2.40.

Globally, crude supply is growing faster than anticipated. Contributing to the surplus is the United States’ record-breaking production levels – which hit the highest level ever recorded by the Energy Information Administration at 11.7 million b/d last month. In addition, there is more Iranian supply in the market than expected due to the U.S. granting crude sanction waivers to some of Iran’s largest importers, including India, South Korea and Japan. To help reduce the growing surplus of global crude supply, this week the Organization of Petroleum Exporting Countries (OPEC) met to discuss the potential of cutting crude production by up to 1 million barrels per day. The announcement was expected yesterday, but the cartel delayed the decision until Friday to give time for non-OPEC countries, including Russia, to decide if they will join the production reduction agreement. Following the delay on Thursday, crude oil prices trended cheaper than earlier in the week because the announcement was not as firm as the market expected. AAA forecasts that as long as crude stays below the $60/bbl mark, Americans will continue to see cheaper gas prices through the end of the year.

“Consumers will have more change jingling in their pockets this holiday season as they save on fuel fill-ups, especially compared to this summer. The national gas price average has dropped more than 50-cents since Memorial Day weekend when the average spiked to a high of $2.97,” said Jeanette Casselano, AAA spokesperson. “As prices continue to drop, some motorists are filling up for $2/gallon or less.”


Depending on what part of the country you are in, gas prices can fluctuate greatly. Some states – mostly the West Coast – are still seeing large year-over year differences, while others have cheaper gas prices than a year ago. Here is a snapshot of highs and lows: 

Year-over-Year differences

  • Top 5 states with cheaper gas prices year-over-year are: Iowa (-29 cents), Missouri (-23 cents), Nebraska (-22 cents), Indiana (-20 cents) and Michigan (-18 cents)
  • Top 5 states with the largest year-over-year difference in gas price averages are: Nevada (+42 cents), Arizona (+40 cents), Utah (+35 cents), California (+34 cents) and Hawaii (+34 cents)
  • Top 5 states with the smallest year-over-year difference in gas price averages are: West Virginia (+1 cents), Colorado (+2 cents), Rhode Island (+3 cents), New Hampshire (+3 cents) and Virginia (-3 cents)

Highest and Lowest Gas Price Averages:

  • Top 5 states with lowest gas price averages: Missouri ($2.01), Oklahoma ($2.09), South Carolina ($2.09), Texas ($2.10) and Alabama ($2.12)
  • Top 5 states with most expensive gas price averages: Hawaii ($3.62), California ($3.49), Washington ($3.27), Alaska ($3.19) and Nevada ($3.12)
  • Top 5 states with the most stations selling gas at $2.00/gal or less (percentage of stations): Missouri (58 percent), Oklahoma (52 percent), South Carolina (41 percent), Texas (40 percent) and Mississippi (35 percent)

 

Winter Fuel & Driving Tips

As you hit the road this winter, AAA offers these tips to help conserve fuel and keep motorists safe:

  • If possible, only run the engine and heater long enough to remove the chill. This will help to conserve fuel. Also, parking your car in a garage will help it stay warm.
  • As a precaution, keep at least half a tank of fuel in your vehicle at all times. It helps to reduce condensation in the fuel system. It also helps ensure an adequate reserve of fuel to run the engine for heat should your car become disabled in a remote location.
  • Be sure to pack an emergency roadside kit in your car containing a mobile phone and car charger, first-aid kit, blankets, drinking water and snacks, a flashlight with extra batteries, a basic toolkit, warning flares, an ice scraper, jumper cables and a shovel.

Motorists can find current gas prices at GasPrices.AAA.com and 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.


Home Latest News Growing Global Crude Supply Outpaces Demand, Driving December Pump Prices to Cheapest of the Year