Pump prices continue their slow seasonal descent, according to AAA, despite a slight rebound in oil prices due to waning fears of a global slowdown caused by the COVID-19 omicron variant. The national average for a gallon of gas fell two cents on the week to $3.33.
“Gas prices tend to fall a bit this time of year due to the shorter days and less robust demand,” said Andrew Gross, AAA spokesperson. “And this trend was assisted by the recent steep drop in oil prices due to fears over the omicron variant. But the variant’s impact on pricing appears to be fading, so it remains to be seen if oil prices stabilize or move higher.”
According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks increased by nearly 4 million bbl to 219,304 million bbl last week. Meanwhile, gasoline demand was relatively flat, creeping upwards from 8.8 million b/d to 8.9 million b/d. The slight increase in demand was countered by crude prices in the low $70s bbl.
Today’s national average of $3.33 is eight cents less than a month ago and $1.17 more than a year ago.
- The nation’s top 10 largest weekly decreases: Michigan (−6 cents), Indiana (−5 cents), Alabama (−5 cents), Illinois (−4 cents), Texas (−4 cents), Missouri (−4 cents), South Carolina (−4 cents), New Mexico (−4 cents), Wyoming (−4 cents) and North Dakota (−4 cents).
- The nation’s top 10 most expensive markets: California ($4.67), Hawaii ($4.33), Nevada ($3.88), Washington ($3.87), Oregon ($3.78), Arizona ($3.78), Alaska ($3.71), Idaho ($3.62), Utah ($3.58) and Pennsylvania ($3.56).
Oil Market Dynamics
At the close of last week’s formal trading session, WTI increased 73 cents to settle at $71.67. Crude prices increased slightly after EIA’s weekly report showed that total domestic crude inventories decreased by 200,000 bbl to 432.9 million bbl. The current storage level is approximately 14% lower than last year’s storage level at this time, which is helping to keep crude prices elevated.
Additionally, prices rebounded last week as optimism increased that the omicron variant of the COVID-19 virus will not have as large an impact on global energy demand as initially feared. For this week, continued optimism could help crude prices continue to rise.