AAA: Fall Will Usher In Lower Gas Prices
ORLANDO, Fla. — This fall, a majority of drivers will find savings of potentially more than 25 cents per gallon compared to this summer.
The national gas price average — which is 15 cents cheaper than five weeks ago — is poised to continue pushing less expensive due to several factors, including less expensive crude oil prices, the drop-off in gasoline demand after Labor Day and the move to winter-blend gasoline, according to AAA.
The association forecasts the national average to drop to $2.40 or lower this fall.
"AAA predicts that fall gasoline prices will be significantly less expensive than this summer with motorists finding savings in every market across the country," said Jeanette Casselano, AAA spokesperson. "Many factors are driving this decrease, but the low price of crude oil is chief among them."
AAA forecasts that crude prices range between $50 and $60 per barrel this fall, which is a considerable drop from last fall when prices ranged between $60 and $75. The cheaper prices is due to current total domestic crude inventories sitting at 438.9 million barrels, which is 31.5 million barrels higher than this time last year.
Here are fall gas prices outlooks by region:
The region is consistently home to the most expensive markets in the country, even though the crude refinery utilization rate in the region has grown to nearly 97 percent this summer. Growing stocks have helped to push prices lower across the region. Gas is $3.01 or more in all seven states in the region except Arizona. As fall brings lower demand for gasoline, AAA expects the West Coast to see gas prices drop, in light of higher stock levels, during the months ahead.
Great Lakes & Central States
Gasoline stocks and regional refinery utilization have seen mostly weekly increases, with the exception of a few, throughout the summer. Moving into the fall, refinery utilization will likely slow as demand hits a post-summer slump and refineries make the switch to winter-blend gasoline production and undergo planned maintenance. Prices should push cheaper, but that won’t stop the typically volatile region from being susceptible to sudden price shocks.
Mid-Atlantic & Northeast
Total gas stocks in the region sit at 61 million barrels which is 3 million barrels less than last year this time. Part of the year-over-year deficit stems from the pending closure of Philadelphia Energy Solutions, the largest refinery on the East Coast. This would usually lead to a spike in gas prices, according to AAA. However, gasoline imports are easing supply concerns and keeping retail gasoline prices moving lower. Though any further supply disruptions could cause prices in the region to spike temporarily.
South & Southeast
Motorists in the South and Southeast can expect to find savings at the pump this fall, potentially even under $2 per gallon by the end of the year, barring any major hurricanes.
Hurricane season has the potential to cause declining gas prices to shoot back up. This month, the National Oceanic and Atmospheric Administration predicted that 2019’s Atlantic hurricane season is expected to be above normal, with 10 to 17 named storms, including five to nine hurricanes. The mere threat of a hurricane making landfall can shutter domestic crude production, leading to spikes in crude and gasoline prices. In 2017, Hurricane Harvey caused the national gas price average to jump 30 cents in a matter of days, AAA reported.
Typically, gas prices skew their highest for the Rockies region during summer tourism season. That was no different this year. However, prices were significantly cheaper than summer 2018: Utah and Idaho's averages priced under $3 per gallon for all of July vs. a high of $3.22 in 2018. As the tourist season winds down and demand slows, gas prices may see some fluctuation, but overall, motorists can expect prices to remain steady as gasoline stocks sit at their highest level — 7.5 million barrels — recorded by the Energy Information Administration for the month of August.
AAA is a not-for-profit organization that provides its members with travel, insurance, financial and automotive services and information.