Georgians are paying the lowest prices in the country today, at $3.24 a gallon. California residents see the highest pump prices – $5.88.
Prices briefly flirted with $4 a gallon early in the month as the country’s supply took several hits. A refinery fire in Ohio and seasonal maintenance at some processing centers have combined to reduce the nation’s gasoline stockpile. Then the OPEC+ consortium of oil-exporting nations voted to slow oil production.
Related:
Prices already down
These factors together led to a brief price spike in October. But prices are falling again.
Patrick De Haan, head of oil analysis at GasBuddy, says further declines are on the way:
Good news on #gasprices: here is my new prediction on #gasprices over the next two weeks…lots of green arrows down. The West Coast and Great Lakes will continue to see the most relief, while others see slight downward trends – for now. pic.twitter.com/1dsqsvjLRU
— Patrick De Haan ⛽️📊 (@GasBuddyGuy) October 20, 2022
This is also due to a combination of factors.
Falling demand, fears of recession
The biggest? We drive less.
The US Energy Information Administration reports that Americans consumed 8.7 million gallons of gasoline last week. This represents a significant drop in our conduct. In the same week last year, we used 9.6 million.
But worries about the state of the global economy are also a factor. AAA explains, “Fears of a global economic recession caused the price of crude to drop significantly, down $7, which helped minimize increases in the price at the pump last week.”
Prices remain historically high – 48 cents higher than a year ago.
Release quantities less than 1 day supply
This may help explain the White House’s decision to release an additional 15 million barrels of oil from the strategic reserve in December.
The reserve can hold about 700 million barrels of oil. About 400 million remain, according to the White House.
The numbers may seem huge. But, to put it into perspective, America uses just over 20 million barrels a day, according to the Department of Energy. About 40% of that total goes to cars.
So the administration release, while significant, equates to less than a day’s supply, spread over a month.