The national fuel price average is six cents more expensive on the week at $1.84, according to AAA, but still cheaper on the month and year — three cents and $1.02 less, respectively. Forty states still have averages of $2 or less per gallon.
“Pump prices are fluctuating throughout the country as demand increases and gasoline stocks decrease,” said Jeanette Casselano, AAA spokesperson. “The boost in demand continues to push pump prices up around the country, as more states re-open businesses. Motorists in the Great Lakes, Central, South and Southeast states are seeing the most volatility at the pump.”
The Energy Information Administration’s (EIA) latest data report showed demand for gasoline increased by 800,000 b/d to 6.7 million b/d last week, which is 3.2 million b/d less than last year at this time. Fuel demand is expected to continue to grow, leading pump prices to continue their increase.
Great Lakes and Central States
The Great Lakes and Central States region is seeing the highest volatility in the country at the pump with eight states in the region topping the list for the largest weekly change. All eight states have double digit increases: Michigan (+31 cents), Ohio (+28 cents), Indiana (+26 cents), Illinois (+26 cents), Wisconsin (+23 cents), Kentucky (+15 cents), Iowa (+14 cents) and Minnesota (+11 cents). This region routinely sees pump price fluctuation, so it is no surprise to see significant increases within the Great Lakes and Central states as many states begin to re-open.
In addition to being home to the largest weekly increases, this is also the only region in the country with state gas price averages more expensive compared to last month.
Five state averages are currently a dime or more than April 2020: Wisconsin ($1.69), Michigan ($1.84), Ohio ($1.85), Indiana ($1.86) and Illinois ($2.11). Illinois is the only state in the region with an average above $1.99.
Gasoline stocks continue to decrease, with the latest draw of 1.1 million bbl bringing total levels to 56.4 million bbl. However, refinery rates increased for a second week, jumping from 72% to 73.5% in the latest EIA report. The decrease in stocks amid increase in production is contributing to the pump price jumps motorists are seeing in the region.
South and Southeast
Pump prices are starting to increase slowly in the South and Southeast region. On the week, Oklahoma (+10 cents), Arkansas (+9 cents), Georgia (+3 cents) and Tennessee (+2 cents) saw the largest increases. All other states either saw averages increase or decrease by a penny, but the region continues to tout averages $1.76 or cheaper.
The EIA reports regional stock levels and refinery rates at the highest points compared to all other regions in the country. Stock levels built by 1.4 million bbl to total 89.5 million while refinery rates jumped to 75%. Of note, gasoline stock levels are at an 8.1 million bbl surplus year-over-year, which could help to keep any increases at the pump somewhat minimal in coming weeks.
Mid-Atlantic and Northeast
The Mid-Atlantic and Northeast region is seeing the least volatility at the pump. On the week, gas prices increased or decreased no more than two cents with the exception of West Virginia (+6 cents), Maine (+6 cents) and North Carolina (+3 cents). All state gas price averages in the region are as much as 15 cents cheaper on the month and over a dollar less on the year.
At the start of this week, averages range from $2.18 in Washington, D.C. to $1.67 in North Carolina.
For a second week, the EIA reports a draw in gasoline stocks in this region. For the week ending May 1, stocks dipped by nearly 2 million bbl to fall to 70.8 million bbl. Regional refinery rates continue to increase too, up to 50%. Small gas price fluctuations are the likely trend motorists can expect to see in the week ahead.
Most state averages continue to decrease across the Rockies region. Wyoming and Utah saw the largest weekly declines in the region at -2 cents, while the averages for Montana and Colorado decreased by 1 cent. Averages in the region range from $1.96 in Utah to $1.70 in Colorado.
All state gas price averages in the region are as much as 15 cents cheaper on the month and more than a dollar less on the year. Utah and Idaho both land on the top 10 list for biggest monthly changes in the country.
Regional gasoline stocks drew minimally to 8.4 million bbl. This stock measurement is at a nearly 2 million bbl deficit year-over-year. Stocks could see increases in coming weeks. Regional refinery rates have increased for three weeks, though down 20% compared to EIA data from early May 2019. Most likely, gas prices in the region will see minimal decreases in the week ahead, but an increase –—small in size — can’t be ruled out.
Although state averages have mostly held steady or increased minimally, pump prices in the West Coast region are still the most expensive in the country. When compared to a week ago, only Alaska (+2 cents), California (+2 cents) and Washington (+1 cent) saw their state averages increase in the region. Arizona (-2 cents) saw the only decline. Hawaii ($3.15) and California ($2.76) remain the most expensive markets in the country. Washington ($2.45), Oregon ($2.38), Nevada ($2.31), Arizona ($2.08) and Alaska ($2.02) follow.
According to EIA’s latest weekly report, total gas stocks in the region decreased from 32.7 million bbl to 31.2 million bbl last week. As more motorists take to the roads in the region this week, gas demand is expected to continue to grow. Higher gas demand could lead pump prices to increase this week.
Oil Market Dynamics
At the end of Friday’s formal trading session, WTI increased by $1.19 cents to settle at $24.74 per barrel. Crude prices increased last week amid growing market optimism that crude demand is rebounding as states re-open businesses and demand for gasoline has grown in recent weeks.
For this week, crude prices may continue to rise if the market believes that crude oil inventories are beginning to rebalance. However, if crude storage levels continue to increase, crude prices could decline if the market continues to worry that the global market is oversupplied.