Crude Oil Prices Hit Highest Price Point in Nine Months

WASHINGTON, D.C. – Pump prices increased on the week despite U.S. gasoline demand falling below 8 million b/d, the lowest weekly reading since June and the softest demand reading for the week of Thanksgiving since 1997. At $2.16, the national gas price average is more expensive on the week (+4 cents) and the month (+5 cents), but cheaper (-42 cents) compared to last year at this time.

“Gas prices were predicted to decrease following the holiday, but robust gains in crude oil prices and the OPEC  decision to increase production next year led to at a number of states seeing pump price jumps of 3 to 12 cents,” said Jeanette Casselano McGee, AAA spokesperson. “Even with the weekly jumps, gas prices remain relatively cheap with 15 state averages at $2/gallon or less.”

Last week, crude oil prices (WTI) reached a high of $46/bbl, a price point not seen in nine months – since early March. However, it is possible that prices have capped and will decrease as coronavirus cases rise, which will likely contribute towards lower demand numbers this month. Ultimately, that will lead to motorists seeing cheaper gas prices the closer we get to the holiday season. Last December the national gas price average was $2.57. One week into the month this year, the average is $2.15.

Quick Stats

•  The nation’s top 10 largest yearly decreases: Arizona (-69 cents), Nevada (-65 cents), Idaho (-64 cents), Alaska (-63 cents), Utah (-63 cents), Colorado (-61 cents), Oregon (-56 cents), Michigan (-55 cents), Wyoming (-54 cents) and Wisconsin (-54 cents).
• The nation’s top 10 least expensive markets: Missouri ($1.81), Mississippi ($1.83), Texas ($1.85), Oklahoma ($1.86), Louisiana ($1.87), Arkansas ($1.87), Wisconsin ($1.89), Tennessee ($1.90), Alabama ($1.90) and South Carolina ($1.91).

Oil Market Dynamics

At the close of Friday’s formal trading session, WTI increased by 62 cents to settle at $46.26. Crude prices increased last week amid continued market optimism that vaccines for the coronavirus will be available in the coming weeks. The market was also buoyed by the Organization of the Petroleum Exporting Countries and their allies, collectively known as OPEC+, agreeing to increase crude production by 500,000 b/d to total 7.2 million b/d beginning in January. This move follows reported disagreements among OPEC+ members whether to extend production cuts for another three to six months amid the pandemic, or – which they agreed to – to move ahead with plans to gradually increase production. However, the cartel and its partners will review crude output monthly and adjust as needed. For this week, the ongoing surge in the number of coronavirus infections domestically may cap crude oil price gains, while states increase measures meant to stop the spread of the virus that could decrease oil consumption.

Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.

About AAA: AAA provides more than 61 million members with automotive, travel, insurance and financial services through its federation of 32 motor clubs and more than 1,000 branch offices across North America. Since 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for safe mobility. Drivers can request roadside assistance, identify nearby gas prices, locate discounts, book a hotel or map a route via the AAA Mobile app. To join, visit AAA.com.