Following Labor Day weekend and the remnants of Hurricane Ida, AAA maintains that the national gas price average has stabilized at $3.18, which is just three cents more expensive on the week. The storm took about 13% of U.S. refinery capacity offline, and while there are no firm restart dates, refineries are expected to be back online this month.
Gasoline stock levels are currently at 227.2 million bbl, which is a healthy level. However, stock levels could tighten until refineries resume normal operations. Typically, a constraint on stocks would mean higher gas prices, but with demand expected to decrease going into the fall, price fluctuation should be minimal. Today’s national average is the same as last month, but 96 cents more than a year ago.
“Historically, gas demand starts to decline in the fall as schools reopen and summer road trips end, which leads to less expensive gas prices,” said Jeanette McGee, AAA spokesperson. “Despite the dip in demand, the national average is expected to remain above $3/gallon especially as crude oil continues to price on the higher end.”
Motorists will welcome the cheaper gas prices following the most expensive summer at the pump in seven years.
The nation’s top 10 largest weekly increases: Ohio (+9 cents), New Mexico (+6 cents), Indiana (+6 cents), North Carolina (+6 cents), Tennessee (+5 cents), Louisiana (+5 cents), New York (+5 cents), Kentucky (+4 cents), Michigan (+4 cents) and Texas (+4 cents).
The nation’s top 10 most expensive markets: California ($4.39), Hawaii ($4.06), Nevada ($4.01), Washington ($3.89), Utah ($3.81), Idaho ($3.79), Oregon ($3.77), Alaska ($3.69), Colorado ($3.60) and Wyoming ($3.57).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI decreased by 70 cents to settle at $69.29. Although crude prices ended the day lower, on the week crude prices were boosted by a weak dollar and the release of government data that showed weekly unemployment claims had fallen to the lowest level since the start of the COVID-19 pandemic.
For this week, crude prices could continue to climb. In the wake of Hurricane Ida, 84% of Gulf of Mexico oil production (1.526 million b/d) remains shuttered, according to the Bureau of Safety and Environmental Enforcement. The downed production could put pressure on crude supplies and prices as the recovery and restoration process unfolds in the region.