Demand Destruction Reigns Supreme as Pump Prices Push Cheaper

gas barrel money

Gas prices in Northern New England and the throughout the country have steadily declined for seven weeks, pushing the national average cheaper by 65-cents to $1.82 today. During this timeframe (since late February), U.S. demand for gasoline has decreased 44% to 5 million b/d as gasoline inventories build across the country.

  • Maine’s average current price is $1.81 per gallon, which is 3 cents lower than one week ago, and 37 cents lower than a month ago.
     
  • New Hampshire’s average current price is $1.89 per gallon, which is 4 cents lower than one week ago, and 37 cents lower than a month ago.
     
  • Vermont’s average current price is $1.95 per gallon, which is 4 cents lower than one week ago, and 43 cents lower than a month ago.

“We are seeing fast and furious gasoline demand destruction. The latest data reveals demand levels not seen since spring of 1968,” said Dan Goodman manager of public affairs for AAA Northern New England. “Every U.S. region is seeing builds in gasoline inventories and crude storage, which is just driving pump prices even cheaper.”

On Sunday, the Organization of the Petroleum Exporting Countries plus (OPEC+), led by Saudi Arabia, announced historic global crude productions cuts – nearly 10 million b/d in May and June.

“While the production cut is historic, it’s likely to not have an immediate impact on pump prices given the ongoing impact the COVID-19 pandemic continues to have on crude oil prices and gasoline demand,” added Goodman.

At $1.82, today’s national average is 6-cents less than last week, and 41-cents cheaper than a month ago.
 

Oil Market Dynamics

US crude oil prices sank below $18 a barrel on Friday, the lowest level since 2002. Crude prices have been volatile this week, after OPEC’s historic agreement with its allies, including Russia. Under the new production reduction agreement, OPEC and its allies expect total global oil cuts to amount to more than 20 million b/d or 20 percent of global supply. Effective May 1, the production cuts are expected to ease in June, but some restrictions will remain in place through April 2022.

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.

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AAA Northern New England is a member club affiliated with the American Automobile Association (AAA) national federation and serves members in Maine, New Hampshire, and Vermont.