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Kentucky gas prices remain among lowest in nation, and new COVID variant could push prices even lower

The national average price for a gallon of gas dropped slightly last week, while a new COVID variant impacting the price of crude oil could push prices lower yet.

Crude oil prices, which have been hovering around $80 a barrel, initially tumbled more than $10 to $68 a barrel on Friday after news of the Omicron COVID-19 variant broke. The price of crude typically accounts for 50-60% of the price at the pump.

“It’s too soon to tell if fears of a global economic slowdown caused by the Omicron variant will push oil prices lower for the long term,” says Lori Weaver Hawkins, public and government affairs manager, AAA Blue Grass. “But for now, the upward pricing pressure due to tightened supply and high demand seems to have abated, and that will likely result in pump prices stabilizing.”

Monday’s national average of $3.39, is down about a penny in the last week, a penny less than a month ago and $1.27 more than a year ago.

(NKyTribune file)

Meanwhile, Kentucky boasts some of the lowest average gas prices in the nation at $3.06, down 2 cents from a week ago and 6 cents lower than a month ago, but $1.13 more than a year ago. Kentucky’s gas price average puts it at 7th in the nation for lowest prices at the pump, trailing only Oklahoma ($2.95), Texas ($2.98), Arkansas ($3.02), Missouri ($3.04), Kansas ($3.04) and Mississippi ($3.04).

For those traveling around the region, Kentucky’s $3.06 per gallon average remains one of the lowest in the area, bested only by Missouri. Gas on average in Kentucky is 4 cents cheaper than in Tennessee, 13 cents less than Ohio and 21 cents lower than Indiana.

Prices at the pump in Kentucky are averaging 27 cents less than West Virginia, 19 cents less than Virginia and 48 cents less than Illinois, but 2 cents higher than Missouri.

The nation’s top 10 least expensive markets: Oklahoma ($2.95), Texas ($2.98), Arkansas ($3.02), Missouri ($3.04), Kansas ($3.04), Mississippi ($3.04), Kentucky ($3.06), South Carolina ($3.09), Tennessee ($3.10) and Wisconsin ($3.10).

The nation’s top 10 most expensive markets: California ($4.71), Hawaii ($4.35), Nevada ($3.96), Washington ($3.88), Oregon ($3.79), Arizona ($3.77), Alaska ($3.71), Idaho ($3.68), Utah ($3.67) and Pennsylvania ($3.59).

At the close of Friday’s formal trading session, West Texas Intermediate (WTI) decreased by $10.24 to settle at $68.15. Crude prices fell amid concerns about the new COVID-19 Omicron variant and the travel restrictions announced by the Biden administration. With little known about the new variant, it is unclear what long-term impact it may have on crude prices.

Before reports of the new variant, Energy Information Association’s (EIA) weekly report revealed that total domestic crude supply increased by 1 million bbl to 434 million bbl. However, prices rose last week despite President Biden’s announcement that the federal government will make available up to 32 million bbl of oil held in the U.S. Strategic Petroleum Reserve (SPR) and accelerate the timeline for the sale of an additional 18 million bbl of SPR oil, as mandated by Congress

The effort is expected to be coordinated with the release of oil from other major crude consuming countries, including China, India, Japan, South Korea, and the U.K, to help reduce the price of crude. How much of a price impact, and how long the price relief at the pump will last, depends on the total amount of oil that moves into the market after the coordinated releases around the globe.

For this week, crude prices could decline further if the global market begins to see an increase in supply from the joint releases or EIA’s next report shows another increase in total domestic supply. Additionally, market watchers will keep their eye on the impact of the Omicron variant on the oil market.

AAA Blue Grass

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