Gas Prices Dip as Fall Nears
NATIONAL REPORT — With the final days of summer approaching, drivers are seeing some relief at the pump.
The national gas price average dropped 1 cent on the week to $3.17; however, it is 98 cents more than one year ago, according to AAA.
The nation's top 10 largest weekly decreases were seen in Ohio (−5 cents), Kentucky (−4 cents), Illinois (−4 cents), Indiana (−4 cents), Nevada (−4 cents), Michigan (−3 cents), Florida (−2 cents), Oklahoma (−2 cents), Utah (−2 cents) and Tennessee (−1 cent).
Meanwhile, the nation's top 10 least expensive markets are Mississippi ($2.79), Texas ($2.81), Missouri ($2.83), Arkansas ($2.84), Alabama ($2.84), Oklahoma ($2.86), Louisiana ($2.89), Tennessee ($2.89), Kentucky ($2.89) and South Carolina ($2.89).
However, the recovery from Hurricane Ida remains slow, with the latest U.S. data showing just under half of the U.S. offshore oil production in the Gulf still idle after companies shuttered production ahead of the storm.
Refinery utilization is down 10 percent, causing gasoline stock levels to fall by 7.2 million bbl to 220 million bbl, according to the Energy Information Administration. Stock levels are likely to remain tight until Ida-affected refineries resume normal operations, AAA reported.
While refineries are reporting progress toward restarting, the U.S. Department of Energy (DOE) said it would release an additional 1.5 million bbl of crude oil held at the U.S. Strategic Petroleum Reserve (SPR) to help ease tightened supplies brought by Hurricane Ida. This is the second such release, and the DOE said the SPR has now released a total of 3.3 million bbl of crude oil in response to the storm.
The constraint on stocks would typically lead to higher prices, but it has been offset by decreased demand going into the fall. In the week ahead, pump prices may be impacted by Tropical Storm Nicholas, which is expected to bring heavy rains and a storm surge to the Texas coast this week. If the tropical storm puts additional refineries offline, prices are likely to increase.
"Timing is everything, and while supplies have tightened due to the slow recovery after Hurricane Ida, this is also the point when gas demand starts its seasonal decline," said Jeanette McGee, AAA spokesperson. "While there may be some price fluctuation, we expect most motorists to see stability at the pump."