Gasoline prices in New England fell a few pennies this week, defying the usual spring pattern of higher prices ahead of the Memorial Day weekend. Gas prices have fallen virtually every day for the last three weeks, pushed down by the sudden drop in crude oil prices.
“Across New England and the country we’re seeing falling gas prices due to continued high production rates from U.S. refineries and a recent drop in crude oil prices. If this trend holds, gasoline will be near or below year-ago levels by Memorial Day, and rival prices seen last summer, said Dan Goodman, manager of public affairs for New Hampshire and Vermont for AAA Northern New England.
- Vermont’s average current price is $2.39 per gallon, which is 2 cents lower than one week ago, and 11 cents higher than one year ago.
- New Hampshire’s average current price is $2.29 per gallon, which is 3 cents lower than one week ago and 11 cents higher than one year ago.
- Maine’s current price is $2.32 per gallon, which is 4 cents lower than one week ago and 2 cents higher than one year ago.
- Massachusetts current price is $2.35 per gallon, which is 1 cents lower than one week ago and 12 cents higher than one year ago.
Oil Market Dynamics
On Friday morning, U.S. petroleum futures were below $50 per barrel, but have gained slightly this week as there were encouraging remarks from the Russian and Saudi Arabian energy ministers over the weekend. The energy ministers stated that there is budding consensus to extend production cuts beyond the June 30 deadline and into 2018, signaling that OPEC and non-OPEC producers are willing to take necessary steps to rebalance the market. Since the cuts were enacted, U.S. oil production has increased more than 10 percent since mid-2016 to a total of 9.3 million barrels per day and close to levels of the world’s top producers – Russia and Saudi Arabia. With some market predictions suggesting that U.S. production could soon reach 10 million barrels per day, OPEC and its partners must continue to restrict supply if their market correction goals are to be achieved. Additionally, U.S. drillers added 6 more oil rigs, bringing the total rig count to 703 and marking 16 weeks of growth, according to last week’s data from energy services firm Baker Hughes Inc. The U.S. rig count is now up a whopping 375 oil rigs when compared to last year’s count at this time. Continued increases in the supply and exploration of crude will certainly counter OPEC’s efforts to rebalance the market. Only time will tell if supply restrictions and rising demand will shorten the oversupply – and ultimately lead to higher retail prices at the pump.
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