Washington, D.C. – The new year has started, but the national gas price average remains unchanged, holding steady at $2.25 for the last 12 days.
Pump price stability at the start of the year is credited to consistent crude oil prices in late December, about $47.00-48.00/bbl, combined with low demand. U.S. gasoline demand, as recorded by the Energy Information Administration (EIA), was at the lowest level for the last week of December in 23 years (since 1998) – at 8.1 million b/d.
“Holiday road travel was down at least 25%. With fewer people on the road, the majority of states saw little change at the pump from the last week of 2020 to the first few days of 2021,” said Jeanette Casselano McGee, AAA spokesperson.
While the national gas price average is nine cents more than last month, January gas prices are already 33 cents cheaper than this time last year. That is the largest year-over-year difference at the beginning of January since 2015. AAA expects demand to dwindle in coming weeks and gas prices to likely be cheaper, especially if crude oil holds at the current price point.
How high or low gas prices will go in 2021 will largely depend on crude oil prices, supply, and demand. AAA expects that as the vaccine becomes more widely available and states loosen travel restrictions, Americans will begin to drive more and at that point, we will see an impact at the pump. At $2.17, 2020 saw the lowest annual national gas price average since 2016.
- The nation’s top 10 year-over-year decreases: Arizona (-60 cents), Utah (-53 cents), West Virginia (-48 cents), Alaska (-48 cents), Idaho (-46 cents), Wyoming (-43 cents), Colorado (-42 cents), Oregon (-42 cents), Connecticut (-42 cents) and Vermont (-41 cents).
- The nation’s top 10 least expensive markets: Mississippi ($1.92), Texas ($1.93), Missouri ($1.95), Louisiana ($1.96), Oklahoma ($1.98), Arkansas ($1.99), South Carolina ($2.01), Kansas ($2.01), Alabama ($2.02) and Tennessee ($2.04).
Oil Market Dynamics
At the close of Thursday’s formal trading session, WTI increased by 12 cents to settle at $48.50. Crude prices increased last week due to a weak dollar and rising market optimism that coronavirus vaccines will help crude oil demand recover in 2021. However, as coronavirus infection rates continue to climb and travel restrictions increase, crude prices will likely be capped this week.
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 – The Auto Club Group
The Auto Club Group (ACG) is the second-largest AAA club in North America with more than 14 million members across 14 U.S. states, the province of Quebec, and two U.S. territories. ACG and its affiliates provide members with roadside assistance, insurance products, banking, and financial services, travel offerings, and more.
ACG belongs to the national AAA federation with more than 60 million members in the United States and Canada. AAA’s mission is to protect and advance freedom of mobility and improve traffic safety.