Gas prices are moving downward with the average price of gas at $2.31 on Jan. 23 —down four cents from last month. Prices have moved lower for 14 of the past 15 days. AAA reported that an increase in U.S. oil production is behind the falling pump prices.
Nonetheless, gas averages are up by 46 cents per gallon compared to one year ago.
The nation’s top least expensive markets are: South Carolina ($2.07), Tennessee ($2.11), Alabama ($2.11), Mississippi ($2.11) and Indiana ($2.12). Meanwhile, Hawaii ($3.07), California ($2.80), Alaska ($2.77), Washington ($2.74) and Oregon ($2.54) have the highest average gas prices.
Global Market Dynamics
AAA reported that at Sunday’s OPEC meeting, energy ministers announced the cartel has successfully limited oil output in an effort to reduce oversupply and support crude oil prices. OPEC also announced that participating countries in the OPEC agreement to cut oil production that was formed late last year, had already cut production by 1.5 million barrels per day.
However, AAA noted OPEC’s production announcement did little to impact crude oil futures, which were trading lower early Monday. Therefore, AAA is attributing the dip in gas prices to an increase in U.S. oil production. Some 35 additional oil rigs were reported by Baker Hughes, which brings the total U.S. rig count to 694, and represents a significant increase in output counteracting OPEC’s production cut.