After stubbornly staying above $80 a barrel since Labor Day, the price of crude oil tumbled this week into the mid-$70s, which could help to lower gas prices — though the relief may be temporary.
Fears of slowing economic activity in the U.S. and Europe due to a resurgence of COVID-19, along with reports that the Biden Administration is calling for release of stockpiled oil by large oil-consuming nations is putting downward pressure on crude prices.
Gas prices in Kentucky also fell again this past week. Today’s average of $3.08 for a gallon of regular unleaded is two cents lower than a week ago. The price is now two cents lower than a month ago, but still $1.16 higher than a year ago at this time.
(NKyTribune file)
“The price of crude oil accounts for about 50%–60% of what consumers pay at the pump, so a lower oil price should translate into better gasoline prices for drivers,” said Lori Weaver Hawkins, public affairs manager, AAA Blue Grass. “But until global oil production ramps back up to pre-pandemic levels, this recent dip in the price of crude may only be temporary.”
Today’s national average of $3.40 is three cents more than a month ago and $1.29 more than a year ago, and 81 cents more than in 2019.
According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 700,000 barrels to 212 million barrels last week. Gasoline demand also dropped slightly from 9.26 million barrels a day to 9.24 million barrels a day. The decrease in demand, alongside stocks, has helped to steady pump prices. However, gasoline prices will likely remain elevated as long as oil prices are near or above $75 per barrel.
For those traveling around the region, Kentucky’s $3.08 per gallon average remains one of the lowest in the area, with several nearby states continuing to see gas prices climb. Gas on average in Kentucky remains three cents cheaper than in Tennessee, which saw a two-cent drop to $3.11 on the week. Ohio is down four cents at $3.22, while Indiana is also down four cents, now at $3.32.
Prices at the pump in Kentucky continue to average 24 cents less than West Virginia, which now fell two cents to land at $3.34. Virginia saw a nickel drop on the week, averaging $3.25, while Kentucky is now a penny higher than Missouri, which sits at $3.07 after dropping another two cents on the week. Illinois remains the high spot, with gas averaging $3.58 after another two-cent climb on the week.
The nation’s top 10 largest weekly changes: Florida (+9 cents), Arizona (+7 cents), Washington, D.C. (−5 cents), Michigan (−5 cents), Texas (−5 cents), Indiana (−5 cents), Ohio (−4 cents), Kansas (−4 cents), Oklahoma (−3 cents) and California (+3 cents).
The nation’s top 10 most expensive markets: California ($4.71), Hawaii ($4.34), Nevada ($3.98), Washington ($3.88), Oregon ($3.78), Arizona ($3.74), Alaska ($3.72), Utah ($3.70), Idaho ($3.69) and Pennsylvania ($3.60).
At the close of Friday’s formal trading session, West Texas Intermediate (WTI) decreased by $2.91 to settle at $76.10. Crude prices declined at the end of last week as the dollar grew in strength and market concerns about crude demand increased over growing COVID infection rates in Europe and the U.S. If social restrictions are re-imposed to curb COVID transmission, crude demand will likely decline and prices will likely follow. Additionally, crude prices decreased last week despite EIA’s weekly report showing that total domestic crude supply decreased by 2.1 million bbl to 433 million bbl. When compared to the end of November 2020, current total domestic crude supply is nearly 12 percent lower than last year.
AAA Blue Grass
