Slow movement at the gas pump; all eyes on tropical storms

(August 25, 2020) At $2.18, the national gas price average increased by one cent this past week. That is the same price as a month ago and 41 cents cheaper than a year ago. The minimal change reflects the slow movement at pumps across the country on the week. The vast majority of states (30) saw pump prices fluctuate by a penny, if at all, according to AAA.

A few states in the Mid-Atlantic and Mid-West saw more significant jumps, including North Carolina (+7 cents), Kentucky (+6 cents), Virginia (+5 cents) and West Virginia (+5 cents), while Indiana (-5 cents) holds the spot for the largest weekly decrease. The increase in these states could be a result of increased demand, but nationally demand saw a one week decline.

“Gasoline stocks hit their lowest level since the pandemic began and demand dipped on the week, down to 8.6 million b/d,” said Jeanette Casselano, AAA spokesperson. “These decreases typically lead to cheaper pump prices, but this summer we’ve seen atypical gas price trends.”

The Energy Information Administration recorded gasoline stocks at their largest one-week draw since May. Total stocks fell by 4 million bbl down to 243.7 million bbl. Year-over-year, stocks are at a 10 million surplus while demand sits 1.3 million b/d less. U.S refinery utilization rates continue to hover at 80%.

Hurricane watch

This week the market is watching Tropical Storms Marco and Laura. Marco, whose force is decreasing and is expected to be a tropical depression late on Tuesday, is less of a concern. However, Laura is forecasted to move into the southeastern Gulf of Mexico and become a hurricane by early Tuesday.

According to the U.S. Department of Interior’s Bureau of Safety and Environmental Enforcement, approximately 58 percent, or 1.065 million b/d, of crude production in the Gulf of Mexico has been shuttered ahead of the storms and 114 (18%) platforms evacuated.

While gasoline stocks remain at a healthy level, if platforms and rigs are offline for an extended amount of time, supply could tighten and gas prices could be impacted. AAA will continue to monitor activity and provide related gas price updates.

Quick stats

    •    The nation’s top 10 largest weekly changes: North Carolina (+7 cents), Kentucky (+6 cents), Virginia (+5 cents), West Virginia (+5 cents), Indiana (-5 cents), Illinois (+3 cents), Michigan (+3 cents), Wisconsin (-3 cents), South Dakota (+2 cents) and Iowa (+2 cents).

    •    The nation’s top 10 least expensive markets: Mississippi ($1.83), Louisiana ($1.86), Arkansas ($1.87), Alabama ($1.88), Texas ($1.88), Oklahoma ($1.88), Missouri ($1.90), Tennessee ($1.91), South Carolina ($1.92) and Kansas ($1.97).