Substantial increase in gasoline demand has little impact on prices

(January 26, 2021) WASHINGTON, D.C. — According to the latest Energy Information Administration (EIA) measurement, gasoline demand jumped from 7.53 million barrels a day to 8.11 million barrels a day. Typically a significant increase in demand results in a comparable decrease in supply, ultimately translating to more expensive pump prices. Surprisingly, the recent large jump in demand has had little impact on gasoline supply and minimal impact on pump prices.

For the week ending Jan. 20, gasoline supply saw a small decrease of 300,000 barrels. At 245 million barrel, supply levels lag behind last year’s reading at this time by 15 million barrels.

At the pump, the national average increased by two cents on the week to $2.40. Five states saw gas prices decrease – Michigan (-5 cents), Indiana (-5 cents), Ohio (-2 cents), North Carolina (-1 cent) and Delaware (-1 cent); while the rest of the country saw nominal increases. Moreover, only three states saw gas price averages increase more than a nickel.

“Most motorists continue to see gas prices increase, but at a slower rate than the past few weeks,” said Jeanette Casselano McGee, AAA spokesperson. “Part of that is due to more stable crude oil prices throughout January. However, if demand continues another week of substantial increases, we can expect to see pump prices get more expensive.”

With the national average 15 cents more expensive than this time last month, every state gas price average is more expensive than December. Year-over-year, motorists are still saving at the pump, on average about 12 cents, with the exception of Maryland (+4 cents).

Quick stats

•  The nation’s top 10 largest weekly increases: Florida (+9 cents), Utah (+9 cents), Nebraska (+5 cents), Idaho (+4 cents), Louisiana (+4 cents), California (+3 cents), Illinois (+3 cents), Nevada (+3 cents), Kentucky (+3 cents) and Connecticut (+3 cents).

•  The nation’s top 10 least expensive markets: Mississippi ($2.09), Oklahoma ($2.11), Texas ($2.11), Missouri ($2.12), Louisiana ($2.14), South Carolina ($2.16), Arkansas ($2.17), Alabama ($2.17), Kansas ($2.18) and Tennessee ($2.19).