WASHINGTON — Retail gas prices have hit a relatively smooth patch.
AAA reported a national average of $2.76 per gallon for July 20, the lowest average for this date since 2010 and almost five cents per gallon (CPG) less than the current 2015 peak reached on June 15. It is also 82 CPG less than a year ago.
This is as the price of West Texas Intermediate (WTI) crude briefly fell below $50 a barrel earlier this week on news of the hotly debated nuclear deal reached between Iran and the United States, China, France, Russia, the United Kingdom and Germany. Politics aside, the market is already anticipating Iran’s return to the global market with the fourth largest oil reserves in the world.
While the national average was relatively stable, some West Coast markets have been more volatile. Leading the pack: California, which had the highest state average at $3.87 per gallon, according to AAA. The state continues to deal with refinery issues—in particular, ExxonMobil’s Torrance facility has remained shut down longer than expected. In addition, supplies of blending components for California Reformulated Gasoline Blendstock for Oxygenate Blending (CARBOB), the state’s mandated, unfinished gasoline, are low. Imports of gasoline that meet California’s tougher standards are growing, but still have not met up with demand.
On a biweekly basis, California gasoline prices jumped 44 CPG, only to stall over the weekend and slip slightly.
The other states leading the July 20 average ranking: Alaska ($3.47 per gallon), Hawaii ($3.34), Nevada ($3.26) and Washington ($3.19). The lowest averages were in South Carolina ($2.37) and Alabama ($2.41), each almost $1.50 per gallon lower than the average of California.
Gas prices in 25 states and Washington, D.C., shifted up or down by no more than 3 CPG week-over-week. Weekly double-digit moves hit consumers in California (up 16 CPG) and Minnesota (11 CPG). Meanwhile, prices fell in 35 states and Washington, D.C., with 12-CPG drops in Ohio, Indiana and Michigan.
On a month-over-month basis, Indiana led in price decreases, off 25 CPG, followed by Michigan (18 CPG) and Illinois (17 CPG). Thirty states saw prices fall by 5 CPG or more. Average retail prices rose in 18 states, with California (up 38 CPG), Arizona (11 CPG) and Idaho (10 CPG) leading the pack.
On a year-over-year basis, all 50 states—including California—and Washington, D.C., saw declines. California had the lowest drop at 17 CPG, while the rest of the country enjoyed 50-CPG or more declines. Connecticut enjoyed a $1.03-per-gallon drop.
AAA said that despite news of a decline in oil rig counts and exports from Saudi Arabia, the market fundamentals remain largely unchanged. U.S. producers keep pumping high volumes of oil from the rigs still in operation, while the lower Saudi exports are because of an increase in gasoline refining in the country as opposed to a decrease in oil production.
According to Patrick DeHaan, senior petroleum analyst for GasBuddy, Gaithersburg, Md., the national average might fall an additional one to two CPG next week. And while some market watchers have suggested that gasoline could fall below $2 per gallon because of the Iran deal, this likely would not happen until early fall, DeHaan said, “after the summer driving season concludes and demand for gasoline weakens and cheaper winter gasoline is welcomed back.”