AAA expects a modest price decrease – between 5 and 20 cents – to end the year
BOISE – (November 27, 2017) – Typical fall gas price savings, in part caused by reduced demand and the switch to cheaper-to-produce winter-blend fuel, have been slow to arrive this year, both on the national level and here in Idaho. Unfortunately, it’s the continuation of a trend.
“AAA has tracked gas prices very closely over the years. Lately, we’ve seen a pattern of smaller seasonal discounts,” says Matthew Conde, public affairs director for AAA Idaho.
Here’s a chart that tracks the seasonal price drop from October 1 through December 31 over the past few years:
Since October 1 of this year, the U.S. average price has dropped 4.5 cents, while the Gem State’s pump price has decreased by ten cents. Based on current market conditions, AAA projects prices will drop by another 5 to 20 cents to end the year.
Summer driving season traditionally brings the highest gas prices, and year-end the lowest, but not this year. The U.S. price reached $2.67 on September 11, while prices dropped to $2.23 on July 5. In Idaho, the high was $2.78 on September 14, and the low was $2.31 on January 3.
The current national average price for a gallon of regular unleaded is $2.51, which is 38 cents more than a year ago, while Idaho’s price is $2.65, an increase of 31 cents over last year.
Market Activity Snapshot
Here are a couple of factors that may currently be affecting national gas price trends:
- Steady consumer demand. Travel volumes have steadily increased over the past several years, and increased demand for fuel can place upward pressure on gas prices. The arrival of colder weather will likely relieve some of that pressure in many parts of the country.
- Growing gasoline exports. According to the Energy Information Administration, the U.S. exported an average record-high 756,000 barrels of fuel per day for the first half of the year, mainly to Central and South American locations with poor refinery utilization. In the second half of 2017, the trend has continued, with exports topping out at 906,000 barrels per day last month. About 1 out of every 12 gallons is currently shipped south.
“As long as there’s another market for U.S. fuel products, consumers could feel a pinch on prices here,” Conde said.
Under current conditions, the U.S. average is expected to fall in the $2.25-$2.35 range by February, but the aftermath of OPEC’s upcoming November 30 meeting could profoundly influence price forecasting.
“The cartel will decide whether or not to extend or even deepen current crude oil production cuts, and that decision could have a significant impact on future market activity,” Conde noted.
Idaho/Rockies regional comparison
“The Rocky Mountain region hasn’t added much refinery capacity over the last decade, which can lead to robust prices and a tight fuel market in the summer,” Conde said. “Cold weather and lower demand usually trigger a drop in regional gas prices that is more pronounced than in places where reduced gas consumption is offset by the increased use of heating oil. Gas prices are slowly on the move, and a savings of ten cents or more by the end of the year isn’t out of the question.”
In October, regional gasoline inventories reached their highest point since the end of June, at just over 7 million barrels. Current inventory levels are higher than last year’s amount at this time, which could help the region to weather any minor price spikes this winter.
Idaho currently ranks 11th in the nation for most expensive gas prices. With a year-to-date average price of $2.56, the Gem State leads the region (Utah – $2.46; Montana – $2.42; Wyoming – $2.35; Colorado – $2.34). The vast majority of gas stations in Idaho (84%) and Montana (94%) are selling gas for $2.51 or more, while gas can be found for $2.50 or less at the majority of gas stations in Colorado (56%), Wyoming (63%), and Utah (71%).
GasPrices.AAA.com site enhancements
“AAA is pleased to add more digital content to help drivers make informed decisions,” Conde said. The AAA Gas Prices website offers several ways to filter the latest data.
Re-designed state price pages include plenty of new information. When a state is selected, a heat map now displays price ranges by county, and 175 new metropolitan areas have also been added to the site.
Motorists can find current gas prices along their route with the free AAA mobile app for iPhone, iPad, and Android. The app can be used to map a route, find local discounts, book a hotel, request an insurance quote, and access AAA roadside assistance. For more information, go to AAA.com/mobile.