Fredericksburg Leader

GAS PRICE DECLINES IN DECLINE AS OIL RALLIES

For the seventh straight week, the nation’s average gas price has fallen, declining 4.9 cents from a week ago to $3.05 per gallon today according to GasBuddy data compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country. The national average is down 50.2 cents from a month ago and 20.3 cents per gallon lower than a year ago. The national average price of diesel has fallen 8.6 cents in the last week and stands at $4.68 per gallon.

“While the national average declined for the seventh straight week, with oil prices rallying, it remains to be seen if we will manage another week of gasoline price declines. We’re still waiting for the national average to fall below $3 per gallon, something that is suddenly a bit less likely given the extreme cold weather, interrupting refining operations in the south, curbing gasoline production and potentially driving prices up slightly,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “While some of the nation’s lowest priced gas stations will probably be forced to raise prices slightly, with some declines still happening in the West Coast, there remains a chance, albeit smaller one, that we could still see the national average fall below $3 per gallon. With the New Year on the doorstep, however, the biggest question motorists have remains what will happen in 2023 – a question GasBuddy’s annual Fuel Outlook will answer later this week.”

OIL PRICESThe price of crude oil has rallied in the last week as China has begun shifting its policies away from Covid-zero and has loosened travel restrictions, likely pushing demand for crude oil up, leading a barrel of West Texas Intermediate crude to rise 36 cents to $79.87 in early trade Tuesday as markets reopened following Christmas, up from $75.76 per barrel a week ago. Brent crude oil was also up 27 cents to $84.19 per barrel in early Tuesday trade, up from $80.50 last Monday. Further rallies are possible, with all eyes on Covid case counts as China begins its reopening experiment. Should there be a significant rise in cases, it could temper oil prices and chill demand in China.

According to Baker Hughes, last week’s U.S. rig count was up 3 to 779 and was 193 rigs higher than a year ago. The Canadian rig count was unchanged at 199 and was 32 rigs higher than a year ago.

OIL AND REFINED PRODUCTSLast week’s report from the Energy Information Administration showed a significant 10.2 million barrel rise in oil inventories, as the SPR fell 4.7 million barrels. Crude oil inventories remain about 6% below the seasonal average. Domestic crude oil production was essentially unchanged at 12.1 million barrels per day, about 400,000 higher than a year ago. Gasoline inventories jumped 4.5 million barrels and stand about 5 million barrels above a year ago, but are still down 3% from the seasonal average. Distillate inventories rose by 1.4 million barrels and are down just 2.9% from a year ago, while remaining about 8% below the seasonal average. Implied gasoline demand, a proxy for retail demand, fell 103,000 barrels per day to 8.26 million, 3% lower than 2021, while refinery utilization slipped 3.3 percentage points to 92.2%.

FUEL DEMANDAccording to GasBuddy demand data driven by its Pay with GasBuddy card, U.S. retail gasoline demand rose last week (Sun-Sat) by 1.3% with Americans traveling ahead of Christmas. Broken down by PADD region, demand rose 2.2% in PADD 1, rose 0.6% in PADD 2, rose 1.6% in PADD 3, rose 0.9% in PADD 4, and fell 2.0% in PADD 5.

GAS PRICE TRENDSThe most common U.S. gas price encountered by motorists stood at $2.99 per gallon, unchanged from last week, followed by $2.89, $2.69, $2.79 and $2.59 rounding out the top five most common prices.The median U.S. gas price is $2.92 per gallon, down 7 cents from last week and about 13 cents lower than the national average.The top 10% of stations in the country average $4.20 per gallon, while the bottom 10% average $2.47 per gallon.The states with the lowest average prices: Texas ($2.62), Oklahoma ($2.64), and Georgia ($2.66).The states with the highest average prices: Hawaii ($5.00), California ($4.27), and Nevada ($3.92).

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