U.S. fuel prices hit low for year, may continue dropping

U.S. fuel prices hit low for year, may continue dropping

Dec. 11 (UPI) — U.S. fuel prices fell to their lowest level this year with an average as of Monday of $2.42 per gallon, or four cents below a week earlier, with potential for more reductions still ahead.

“Month-over-month, gas price averages have dropped double digits for every state. For some in the Great Lakes and Central states (Iowa, Kansas, Nebraska and Missouri) state gas prices are as much as 40-cents less than they were in November,” AAA spokesperson Jeanette Casselano said Monday.

The AAA drivers’ organization expects the national gas price average to drop to as low as $2.40 per gallon by the end of the year.

GasBuddy separately estimated the national average at $2.41 per gallon, or 2.7 cents lower from the previous week.

“We appear poised to see the national average drop perhaps at least one more week, and we could close this week with the nation’s average in the $2.30s, the lowest in over a year,” said Patrick DeHaan, head of petroleum analysis for GasBuddy.

Not every state saw cheaper gasoline, with four states in the Great Lakes and Central Region seeing a rise.

Michigan and Indiana saw gasoline prices about 7 cents higher on the week, with Ohio trailing with prices about 6 cents per gallon higher.

“The increase is unexpected as demand is declining and supply increased in the region on the week,” the AAA said. In the regional balance, the average was pulled lower as eight states saw cheaper gasoline prices with North Dakota seeing the biggest decline of all, with drivers there paying 8 cents less per gallon.

State gasoline price averages in the region range from $2.40 per gallon in South Dakota to $2.00 per gallon in Missouri. In fact, motorists in Missouri can find gas for $2 per gallon or less at 70 percent of all the fuel service stations in the state.

As for the South and Southeast regions, more than half of all states have gas price averages at or under $2.10 per gallon, the AAA added. Oklahoma has the largest percentage of stations with prices under $2 per gallon, it added.

The region saw a large decline in gasoline stocks, but likely due to exports.

Prices in the Mid-Atlantic and Northeast states were about six cents lower on the week, the AAA said.
“Total gasoline stocks continue to measure above the 61 million barrel mark for the third week, which is nearly a 3 million barrel surplus year-over-year,” the AAA said.

Prices in the West Coast also continued to drop, with all state averages lower on the week. Alaska prices were eights cents lower per gallon, leading the regional declines. West Coast gasoline stocks rose on the week but are still below their year-ago level, the AAA added.

Fuel sold in service stations across most of the United States is a combination of RBOB, or reformulate gasoline blendstock for oxygenate blending, which is naphtha obtained from crude oil, that is later mixed with about 10 percent ethanol in most cases.

RBOB gasoline futures for January delivery were quoted early Tuesday in the CME exchange at $1.43 per gallon, down from $1.47 per gallon a week earlier.

Ethanol, which is alcohol derived from corn and mainly used to improve the fuel’s environmental impact as it adds oxygen, was quoted early Tuesday at $1.23 per gallon for January delivery, This compares with $1.28 per gallon a week earlier.

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