Gasoline prices are on the longest downward streak since 2015, but the reprieve could soon be over.
Gasoline prices have fallen for 14 consecutive weeks with the national average price of gasoline surpassing 2018’s record decline, said Patrick De Haan, head of petroleum analysis, GasBuddy, a Boston-based provider of retail fuel pricing information and data.
The average price of gasoline has dipped by 3.9 cents from a week ago to $3.64 per gallon on Sept. 19, according to data from GasBuddy that was compiled from over 11 million individual price reports from over 150,000 stations nationwide.
The national average fell by 25.7 cents from a month ago, but it is still 45.9 cents higher than a year ago. The national average price of diesel has fallen by 7 cents in the last week and stands at $4.93 per gallon.
”While some states continue to see gas prices trend higher, the majority have continued to decline," he said.
The decline in gasoline prices could reverse as soon as this week because of some issues arising in the Plains and Great Lakes states due to the start of the transition to winter gasoline, De Haan said. BP’s Whiting, Indiana refinery also had to shut down to make repairs after an electrical fire.
"I think we have the best potential to see the weekly trend of falling prices snapped," he said. "West Coast states also continue to see increases as unexpected refinery issues continue to percolate, preventing a downward move. While gasoline could nudge higher, diesel prices should continue to ease after a much-needed jump in inventories last week.”
The most common gas price is $3.39 per gallon, unchanged compared to last week while the median gas price is $3.44 per gallon, down 5 cents from last week and about 20 cents lower than the national average, De Haan said.
The states with the highest average prices are California at $5.38 a gallon, Hawaii at $5.22 a gallon and Nevada at $4.87 a gallon.
The states with the lowest average prices are Mississippi at $3.07 a gallon, Louisiana at $3.09 a gallon and Georgia at $3.13 a gallon.
Demand for fuel continues to drop across the U.S. Retail gasoline demand declined by 0.1% across four of the five PADD regions, rising only in PADD 1, which includes the East Coast, by 1.8%, according to GasBuddy demand data driven by its Pay with GasBuddy card.
Oil Prices Decline
Crude oil has continued a long slide as well. West Texas Intermediate was trading below $83 a barrel to start the week before rebounding some. Brent crude started trading below $89 per barrel before it too rose some. Both remain well below where they began last week.
The crude oil market faced more pressure as last week's CPI report showed a higher level of inflation continuing, raising more fears of an economic recession. As the broader stock market waits for the Fed's decision later this week on the amount of its hike, investors are concerned about rising interest rates while the strong U.S. dollar erodes oil prices.
Market conditions prompted some investment banks to slash their predictions for oil. By the end of the year, Brent, the international benchmark, will be trading at USD 100 a barrel, David Wilson, commodities strategist of BNP Paribas wrote in a research report.
"We expect short-term downward price pressure – driven by Chinese crude imports, Libyan production and U.S. Strategic Petroleum Reserve releases – to increase due to refinery maintenance and a potential Iranian nuclear deal," he wrote.
In 2023, crude oil balances will "tighten further on the back of a full European ban on Russian crude imports in the first quarter and SPR inventory replenishment from the second to third quarters," Wilson wrote.
"An Iran deal is a potentially bullish factor in 2023, but Iran’s reluctance to accept oversight of its nuclear programme means the likelihood of a deal is low, in our view," he wrote. "Recent indications from Saudi Arabia that OPEC+ is willing to cut production in 2023 to support prices suggest further upside next year."
Last week’s U.S. rig count rose slightly by four rigs to 763. That was 251 rigs higher than a year ago, according to Baker Hughes. The Canadian rig count also increased slightly by six rigs to 211, 57 rigs higher than a year ago.