Gas prices continue to decline in New England and around the country. Today’s national gas price average of $2.39 is the lowest pump price of the year, a price point not seen since mid-December last year. The last time the national average was cheaper on the week, month and year was during July 2017.
“Motorists are noticing a big difference as they fill-up at the gas pump,” said Dan Goodman, manager of public affairs for AAA Northern New England. “Month-over-month, gas price averages have dropped double digits for every state.
- Vermont’s average current price is $2.63 per gallon, which is 4 cents lower than one week ago, and 20 cents lower than a month ago.
- New Hampshire’s average current price is $2.47 per gallon, which is 4 cents lower than one week ago, and 20 cents lower than a month ago.
- Maine’s average current price is $2.41 per gallon, which is 3 cents lower than one week ago, and 23 cents lower than a month ago.
How low can gas prices go? AAA expects the national gas price average to drop as low as $2.40 by the end of the year due to cheaper crude oil prices. However, pump prices this cheap may not last into 2019. On Friday, the Organization of the Petroleum Exporting Countries (OPEC) announced that the cartel and non-OPEC members, including Russia, will reduce production by 1.2 million b/d for the first six months of the year. While the decision will help to reduce the high level of global crude supply, the move has the potential to increase oil and gas prices. Crude was up to $52.33 on Friday, while the week prior, crude was as cheap as $50/bbl.
Oil market dynamics
At of Friday morning formal trading session on the NYMEX, WTI settled at $52.33. Oil prices rallied at the end of last week after OPEC announced that beginning in January 2019, the cartel – alongside non-OPEC members, including Russia – will reduce combined crude oil production by 1.2 million b/d. The cut will be in place for six months and will use October 2018 as a baseline, a time when OPEC and Russia had less crude output than in November. With the announcement, crude prices will likely increase in 2019 ahead of the higher demand driving season next summer. Increased crude prices will likely lead to higher gas prices, given that approximately 50 percent of the cost motorists pay at the pump is based on the cost of crude used to make gasoline.
In related news, EIA’s report for the week ending on November 30 revealed that crude inventories decreased by 7.3 million bbl after 10 weeks of consecutive growth. Total domestic crude inventories now sit at 443.2 million bbl, which is approximately 5 million bbl less than their level at this time last year. Declining inventories contributed to the increase in crude prices this week, and if the trend continues, prices could climb further.
Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.