Gas prices rising despite plummeting demand

(January 12, 2021) WASHINGTON, D.C. — At $2.31, the national gas price average is at its highest in 10 months. Pump prices have increased despite gas demand falling from 8.1 million barrels a day to 7.4 million barrels a day — the lowest level recorded since the end of May 2020, according to the Energy Information Administration’s (EIA) latest weekly report. Today’s average is six cents more than last week, 16 cents more than a month ago, but still cheaper than last year by 27 cents, according to AAA.

“Gas prices are rising as supply tightens and crude oil gets more expensive. Decreasing demand is outweighed by these other factors at the moment,” said Jeanette Casselano McGee, AAA spokesperson. “Last week crude oil pushed to the highest price since before the pandemic. If crude prices remain high, Americans can expect to pay more at the pump this month.”

By EIA measurements, U.S. gasoline supply sits at 241 million barrels. While this is the healthiest measurement since August 2020, it is 10 million barrels less than the start of 2020 (251 million barrels) when COVID-19 concerns were minimal. This year-over-year deficit, combined with lower refinery production rates and ongoing refinery maintenance, is pushing crude and gas prices more expensive.

On the week, all state gas price averages are more expensive with nearly 30 state averages increasing by at least a nickel. Three states saw double-digit jumps: West Virginia (+17 cents), New Mexico (+11 cents) and Florida (+10 cents). With this week’s pump prices increasing, only one states has an average of less than $2/gallon: Mississippi ($1.99).
 Quick stats

    •     The nation’s top 10 largest weekly increases: West Virginia (+17 cents), New Mexico (+11 cents), Florida (+10 cents), Kentucky (+9 cents), Tennessee (+9 cents), South Carolina (+9 cents), Arkansas (+8 cents), North Carolina (+8 cents), Missouri (+8 cents) and Ohio (+8 cents).  

    •    The nation’s top 10 least expensive markets: Mississippi ($1.99), Texas ($2.01), Louisiana ($2.02), Missouri ($2.03), Oklahoma ($2.03), Kansas ($2.06), Arkansas ($2.07), Alabama ($2.08), South Carolina ($2.10) and Tennessee ($2.13).