NATIONAL AVERAGE RISES FOR FIRST TIME SINCE SEPTEMBER, BUT CHEAP GAS COULD LINGER

For the first time since mid-September, the nation’s average price of gasoline has increased, rising 2.9 cents from a week ago to $3.07 per gallon yesterday according to GasBuddy data compiled from more than 12 million individual price reports covering over 150,000 gas stations across the country. The national average is down 13.8 cents from a month ago but 1.8 cents per gallon higher than a year ago. The national average price of diesel has risen 0.6 cents in the last week and stands at $4.00 per gallon—68 cents lower than one year ago.

“After 13 straight weeks of decline, average gasoline prices have edged higher due to optimistic comments from the Fed on cutting interest rates in 2024, coupled with Houthi attacks on vessels in the Red Sea, boosting concerns of a disruption to global shipping, including oil shipments,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “For now, the price of gasoline has already jumped but could ease slightly this week ahead of the New Year. For now, I’m optimistic that we may still have a chance of seeing the first $2.99 national average since 2021 sometime before spring arrives. We’ll have the full details on what we expect for gasoline and diesel prices in 2024 later this week. Hopefully, motorists will be able to celebrate a New Year with good news at the pump!”

OIL PRICES

Oil continued its rally into the quiet week between Christmas and New Year’s, thanks to continued geopolitical concerns in the Middle East and renewed optimism that the Federal Reserve will move to cut interest rates in the year ahead, boosting economic growth and demand for oil. In early Tuesday trade, a barrel of West Texas Intermediate crude oil was up $1.68 per barrel to $75.24, up from last week’s $73.16 per barrel level. Brent crude was also trading higher, up $1.67 to $80.74 per barrel, up from last week’s $78.39 per barrel level. The Red Sea remains a point of contention for global shipping, and concerns over Houthi attacks continuing have played a role in rising oil prices, but over the last day, Maersk has signaled it is preparing to resume shipping routes through the impacted region.

OIL AND REFINED PRODUCTS

Last week’s report from the Energy Information Administration showed a 2.9-million-barrel increase in U.S. crude oil inventories, while the SPR rose 600,000 barrels and domestic crude oil production reached a new record high of 13.3 million barrels per day. On the refined side, gasoline inventories rose 2.7 million barrels and distillates picked up 1.5 million barrels, while implied gasoline demand, a proxy for retail consumption, rose 106,000 bpd to 8.75 million barrels per day. Refinery output surged 2.2 percentage points to 92.4%, with gasoline production reaching 10 million barrels per day.

FUEL DEMAND

According to GasBuddy demand data driven by its Pay with GasBuddy™ fuel card, U.S. retail gasoline demand saw a decrease of 0.3% for the week ending December 23 (Sun-Sat). Broken down by PADD region, demand rose 0.6% in PADD 1, fell 0.9% in PADD 2, fell 0.9% in PADD 3, rose 3.0% in PADD 4, and fell 3.4% in PADD 5. GasBuddy models U.S. gasoline demand at 8.518 million barrels per day.

GAS PRICE TRENDS

The most common U.S. gas price encountered by motorists stood at $2.99 per gallon, unchanged from last week, followed by $2.89, $2.79, $3.15, and $2.69 rounding out the top five most common prices.
The median U.S. gas price is $2.95 per gallon, up 7 cents from last week and about 12 cents lower than the national average.
The top 10% of stations in the country average $4.34 per gallon, while the bottom 10% average $2.52 per gallon.
The states with the lowest average prices: Oklahoma ($2.60), Mississippi ($2.64), and Texas ($2.65).
The states with the highest average prices: Hawaii ($4.61), California ($4.54), and Washington ($4.07).

DIESEL PRICE TRENDS

The most common U.S. diesel price stood at $3.99 per gallon, unchanged from last week, followed by $3.89, $3.79, $3.69, and $3.59 rounding out the top five most common prices.
The median U.S. diesel price is $3.89 per gallon, unchanged from last week and about 11 cents lower than the national average for diesel.
Diesel prices at the top 10% of stations in the country average $5.08 per gallon, while the bottom 10% average $3.33 per gallon.
The states with the lowest average diesel prices: Texas ($3.46), Oklahoma ($3.54), and Mississippi ($3.59).
The states with the highest average diesel prices: Hawaii ($5.56), California ($5.44), and Washington ($4.94).