Optimism about COVID vaccine pushes gas prices higher despite low demand
Press release from AAA:
Today’s national average price for a gallon of gasoline is $2.16, up 3 cents from one week ago. One year ago, the price was $2.58. The New York State average is $2.25 – up 2 cents from last week. A year ago, the NYS average was $2.68. AAA Western and Central New York (AAA WCNY) reports the following averages:
- Batavia -- $2.22 (up 3 cents since last week)
- Buffalo -- $2.19 (up 2 cents since last week)
- Ithaca -- $2.24 (up 6 cents since last week)
- Rochester -- $2.24 (up 3 cents since last week)
- Rome -- $2.33 (up 3 cents since last week)
- Syracuse -- $2.19 (up 5 cents since last week)
- Watertown -- $2.30 (up 2 cents since last week)
The national average price for a gallon of gas has inched up 4 cents in the past month, but it is 42 cents lower than last year at this time. Since mid-November, domestic crude prices have steadily increased topping $45 per barrel, contributing to pump prices rising across the country. Crude prices increased amid growing market optimism that vaccines for the coronavirus will be available in coming weeks, but then oil prices stalled as the number of infections surged domestically.
Going forward, low demand will likely limit price gains, with the latest report from the Energy Information Administration (EIA) showing that demand decreased dropped to its lowest reading since early June. Demand typically drops in the winter driving season, so American drivers should expect gas prices to remain lower when compared to last year’s pump prices, moving into 2021.
"With oil's rally to a new COVID-19 high-water mark, gas prices have begun to follow, even as gasoline demand crumbles to some of the lowest levels in months," said Patrick De Haan, head of petroleum analysis for GasBuddy. "Optimism continues to propel oil markets higher, led by positive news on a COVID-19 vaccine, but should anything change timing wise, we could a reversal, but for now it remains full steam ahead with markets focused on the promise of oil and gasoline demand rising, or the best potential outcome of the situation. Should the hype be overblown, a correction could happen in the weeks or months ahead. For now, motorists may see more volatility in oil markets then we've seen in months."