A nonprofit publication of the Kentucky Center for Public Service Journalism

Gasoline demand weakens nationally, motorists continue to see cheaper pump prices in Kentucky

Kentucky saw gas prices drop another 4 cents last week, landing at $1.90. That puts the Commonwealth in second place in the nation for week-over-week decreases, a position it shares with five other states.

The national gas price average pushed a penny cheaper on the week to $2.11, following an increase in gasoline stocks and a dip in demand. Stocks added 1.5 million barrels to total 227.6 million barrels, in the Energy Information Administration’s latest report, while demand decreased to 8.3 million barrels per day.

“As some states increase travel restrictions, demand is likely to weaken, though prices probably won’t drop as low as we saw in March and April,” said Lori Weaver Hawkins, public and government affairs manager, AAA Blue Grass. “But continuing weak demand still translates to a continuation of cheaper gas prices at the pump.”

While crude oil prices rallied on the week, up from a four-month low of $35/barrel to as high as $39/barrel, they remain extremely inexpensive. This is a dominant factor, along with low demand, contributing to the cheaper prices seen at pumps around the country.

On the week, only four states saw gas prices increase: Indiana (+6 cents), Ohio (+6 cents) and Illinois (+2 cent) and Washington, D.C. (+1 cent). As has been the trend for weeks now, the majority of gas price averages across the country continue to push cheaper, including prices here in Kentucky.

Nearly 20 states start the week with an average at least three cents cheaper than last Monday. At $2.11, today’s national average is seven cents cheaper than last month and 51 cents less expensive than last year.

Gas Prices Remain Lower Around the Bluegrass
Today’s average of $1.90 in Kentucky is 11 cents less than a month ago. Today’s gas price in Kentucky is well below the Commonwealth’s average of $2.44 seen a year ago. In Lexington, the average price mirrors the state average, at $1.91, down 6 cents from last week and 13 cents lower than a month ago.

Surrounding communities have also seen gas prices fall in the past week, all of them more dramatically than either the Kentucky or national changes in price. In Nicholasville, the average price is down 6 cents, now at just $1.82. Georgetown is down 8 cents, now averaging $1.86. Versailles is down 5 cents to land at $1.99, while Winchester is down 11 cents at $1.81. Richmond is down 7 cents, landing at $1.95.

Elizabethtown is the community with the lowest price in Kentucky at $1.74. The high spot in the state is Louisville, at $2.01.

Quick stats
• The nation’s top 10 largest weekly changes: Delaware (-7 cents), Indiana (+6 cents), Ohio (+6 cents), Michigan (-4 cents), Florida (-4 cents), Texas (-4 cents), Maryland (-4 cents), Kentucky (-4 cents), Georgia (-4 cents) and Missouri (-3 cents).
• The nation’s top 10 least expensive markets: Missouri ($1.76), Texas ($1.77), Mississippi ($1.78), Oklahoma ($1.78), South Carolina ($1.81), Arkansas ($1.81), Louisiana ($1.83), Alabama ($1.84), Tennessee ($1.85) and Kansas ($1.88).

Oil Market Dynamics

At the close of Friday’s formal trading session, WTI decreased by $1.65 to settle at $37.14. Domestic crude prices fell due to market concern about increasing coronavirus infections worldwide, which will lower crude demand as countries impose more restrictions that will reduce oil consumption.

The drop in crude prices occurred despite EIA’s weekly report showing that total domestic crude inventories declined by 8 million barrels to 484.4 million barrels. As demand concerns continue to weigh on the market this week, crude prices will likely continue to decrease.

From AAA Blue Grass

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