Gas Pump Savings Seen Across the Country, Could Just be the Beginning

Crude oil prices hit 4-year low amid OPEC disagreement and coronavirus concerns

052918-gas-report

Gas prices in Northern New England and the throughout the country are seeing prices at the pump continue their sharp decline. The national gas price average is cheaper on the week (-5 cents), month (-5 cents) and year (-9 cents) – giving the vast majority of motorists savings at the pump. At $2.38, the national gas price average has not been this cheap since last February.

“For the third week, U.S. gasoline stocks decreased while demand increased. Generally, growing demand amid declining stocks causes increases at the pump, but crude oil prices have dipped to four-year lows, signaling spring could be cheaper at the pump,” said Dan Goodman, manager of public affairs for AAA Northern New England.

 

  • Maine’s average current price is $2.36 per gallon, which is 5 cents lower than one week ago, and 12 cents lower than a month ago.
     
  • New Hampshire’s average current price is $2.35 per gallon, which is 3 cents lower than one week ago, and 5 cents lower than a month ago.
     
  • Vermont’s average current price is $2.53 per gallon, which is 2 cents lower than one week ago, and 7 cents lower than a month ago.

 

When the global markets opened on Sunday evening, West Texas Intermediate (WTI) crude oil prices dipped below $30/bbl for the first time since 2016. The market plunge is in response to a lack of agreement between Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries to cut production. The trend of pump prices facing downward pressure is likely to continue through the end of the winter driving season if crude remains cheap, especially amid concerns about the coronavirus.

 

Oil Market Dynamics

 

At the close of Friday’s formal trading session on the NYMEX, WTI decreased by $4.62 to settle at $41.28. Crude prices plunged at the end of last week after OPEC and other major crude producers, including Russia, failed to set a new production reduction agreement amid mounting global crude demand concerns caused by COVID-19. The rapid decline in crude prices has increased market concerns that an oil price war may breakout this week between major crude producers, contributing to further economic troubles worldwide as crude prices continue to drop dramatically. Moreover, the market continues to worry that the impact of COVID-19 will lead to a reduction in global economic growth and global travel, with crude demand expected to decrease. Until it appears that the international public health threat from the virus decreases, crude prices are likely to continue facing significant downward pressure.

As North America’s largest motoring and leisure travel organization, AAA provides more than 60 million members with travel, insurance, financial, and automotive-related services.  Operating 19 offices throughout Maine, New Hampshire and Vermont, AAA Northern New England is a not-for-profit, fully tax-paying corporation and serves as an advocate for the safety and security of all travelers.  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.