Today’s national average price for a gallon of gasoline is $2.56, no change since last week. One year ago, the price was $2.85. The New York State average is $2.72 – down 2 cents from last week. A year ago, the NYS average was $3.
AAA Western and Central New York (AAA WCNY) reports the following averages:
- Batavia - $2.69 (down 2 cents since last week)
- Buffalo - $2.69 (down 2 cents since last week)
- Ithaca - $2.61 (down 3 cents since last week)
- Rochester - $2.69 (down 2 cents since last week)
- Rome - $2.72 (down 2 cents since last week)
- Syracuse - $2.58 (down 2 cents since last week)
- Watertown - $2.68 (down 2 cents since last week)
In its latest petroleum status report, the Energy Information Administration (EIA) revealed that gas demand increased by 336,000 barrels per day to 9.8 million barrels per day. This latest rate is 158,000 barrels per day higher than the first week of September 2018, which is surprising as demand generally slows post-Labor Day.
AAA has noticed a trend this year where the summer travel season is extending into fall. We have seen an uptick in the number of requests for fall road trips and travelers began booking fall foliage tours earlier than usual this year. Popular locations include the Finger Lakes, the Niagara wine trail, and Northeast destinations including Maine, New Hampshire and Vermont.
EIA’s data also showed that total domestic gasoline stocks fell. Although demand rebounded to a level seen during a typical summer, cheap crude prices have helped to keep the national average mostly steady this week while regional prices all dropped.
Over the weekend, Saudi Arabia experienced drone attacks on two major oil facilities – including the world’s largest, Abqaiq. The attacks have taken 5.7 million (crude) barrels per day off the market, accounting for about 6 percent of the global supply.
Prior to the attacks, global crude oil supply was very healthy, in fact sitting on a global glut of stocks. This had driven the price of crude oil cheaper – as low as $52/bbl (West Texas Intermediate, WTI) this year – and led to lower gas prices, too.
Despite the global glut of crude, initial market reaction to the attacks spiked crude oil prices. At the start of the work week, crude oil (WTI) is trading for $5/bbl more than on Friday’s closing, up to $61/bbl – a price point for crude not seen since May (when gas prices were at their highest point this year).
Since the price of crude accounts for at least 50 percent of the total retail price, as crude increases so will the price Americans pay to fill-up.
Right now, AAA is forecasting that Americans can expect local pump prices to start to increase this week.
The jump could end up being as much as a quarter seen throughout this month. Whether this is a short or long term trend will be determined by the price of crude oil and how quickly the facilities in Saudi Arabia can recover. Damage to the facilities is still being accessed, but there is no word if it will be days, weeks or even months before infrastructure is repaired and back online.
To ease concerns, President Trump said he has authorized the release of crude from the Strategic Petroleum Reserve. Other Saudi-oil-consuming countries also have emergency reserves to help backfill the global loss, if needed.
Notably, the United States currently depends less on crude imports from Saudi Arabia. The latest Energy Information Administration (EIA) report showed that the United States imported the least amount of crude oil from Saudi this decade. In the first half of this year, on average, the United States imported about 18,000 bbl compared to 35,600 bbl in the first half of 2017.
According to the EIA weekly gasoline stock reports, U.S. gasoline stock levels have been decreasing the past few weeks. Today, total domestic stocks sit at 228 million bbl, which is ahead of the five-year average for this time of year by several million.