Gas Prices Continue Uninterrupted Daily Declines
NATIONAL REPORT — Lackluster demand for gas and lower oil prices are leading to slumping prices at the pump.
Today's national average of $4.35 is down 17 cents from last week. It is 63 cents less than one month ago and $1.20 more than one year ago. The steady decline is due to low domestic demand for gasoline and oil prices that remain in the mid-$90s per barrel, AAA reported.
The price of gas has now fallen every day since hitting a record $5.01 on June 14.
"Consumers appear to be taking the pressure off their wallets by fueling up less," said Andrew Gross, AAA spokesperson. "And there's reason to be cautiously optimistic that pump prices will continue to fall, particularly if the global price for oil does not spike. But the overall situation remains very volatile."
The nation's top 10 largest weekly decreases were seen in Kansas (−29 cents), Iowa (−25 cents), Oklahoma (−25 cents), Missouri (−23 cents), Ohio (−22 cents), Wisconsin (−22 cents), Nebraska (−22 cents), Delaware (−21 cents), Wyoming (−21 cents) and Indiana (−21 cents).
The nation's top 10 least expensive markets are Texas ($3.85), South Carolina ($3.86), Georgia ($3.88), Mississippi ($3.89), Alabama ($3.92), Tennessee ($3.93), Arkansas ($3.93), Louisiana ($3.94), Oklahoma ($3.96) and Kentucky ($4).
According to new data from the Energy Information Administration (EIA), gas demand rose from 8.06 million b/d to 8.52 million b/d last week. However, that rate is 800,000 b/d lower than last year and is in line with demand during the middle of July 2020, when COVID-19 restrictions curbed demand.
Additionally, total domestic gasoline stocks increased by 3.5 million bbl to 228.4 million bbl, signaling that low demand led to growth in inventory last week. If gas demand remains low as stocks increase, alongside a continuing reduction in crude prices, drivers will likely continue to see pump prices decline, reported AAA.
At the close of the formal trading session on July 22, West Texas Intermediate decreased by $1.65 to settle at $94.70. Crude prices declined last week as the market continues to worry that weak demand, which was expected to remain robust throughout the summer, could continue to push prices lower. A strengthening dollar also helped to push crude prices lower last week. For this week, crude prices could continue to decline if demand concerns persist.
EIA also reported that total domestic crude stocks decreased by 500,000 bbl to 426.6 million bbl, just over 13 million bbl lower than the storage level in mid-July 2021.
As Convenience Store News previously reported, new statistics show that pump-to-store conversion rates are directly correlated to gas prices. According to VideoMining's C-store Shopper Insights, enabled by CSI Tracker, high gas prices mostly impact the pump-to-store conversion rate of those customers who pay at the pump. Since 70 percent of all fuel customers paid at the pump in the first quarter of 2022, that's a majority of fuel buyers. Of those customers, only 22 percent made any in-store purchases.
Interestingly, high gas prices have not affected fuel buyers who pay in-store. The pump-to-store conversion rate for fuel buyers who pay in-store remains unchanged at 33 percent for both Q1 2022 and Q1 2021. This number is also the same when compared to 2019.