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Pump prices remain at 4-year lows, though demand will rise as states begin to reopen
By: Ragina C. Ali, AAA Mid-Atlantic
After pump prices steadily declined due to low gas demand and cheap crude prices in response to COVID-19, today marks the second day in ten weeks that the national average for a gallon of regular gasoline has increased. New data from the Energy Information Administration (EIA) revealed that domestic gas demand continues to increase, which helped to push up the national average. As more states aim to end their stay-at-home orders and businesses around the country begin to reopen, gas demand is likely to continue increasing and pump prices are likely to stabilize.
Today’s gas price average in the District of Columbia is $2.18, the same as last week and down 79 cents from last year on this date. Prices in the Washington, D.C. metro area are $1.96 today, down two cents from last week and down 84 cents from last year. The price in the metro area first dropped to $2 on April 15.
Today’s national gas price average is $1.77, down one cent in the last week, down 21 cents in the last month and down $1.11 from this time last year.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
|Today||Week Ago||Year Ago|
|Crude Oil||$19.78per barrel(5/1/20)||$16.94per barrel(4/24/20)||$61.94per barrel(5/3/20)|
At the close of NYMEX trading Friday, West Texas Intermediate (WTI) crude oil settled at $19.78 per barrel, $2.84 higher than last Friday’s close. Throughout the week, oil settlements remained below $20 per barrel. Domestic crude prices grew this week amid optimism that refiners are continuing to make necessary production cuts to reduce the crude oversupply challenges due to low crude demand caused by COVID-19. Moreover, with rising gasoline demand likely in the coming weeks, market observers believe crude and gas demand may have already reached their lowest points for 2020 and continued price increases will follow.
“Area drivers are paying at least 79 cents less for gasoline than one year ago and the lowest pump prices in more than four years,” says John B. Townsend II, manager of Public and Government Affairs for AAA Mid-Atlantic. “However, as the country starts to slowly reopen, an increase in gasoline demand will likely cause gas prices to stabilize and increase slightly.”
The Week Ahead
Stay-at-home orders and reduced economic activity have decreased transportation fuel demand, contributing to record increases in U.S. commercial crude oil inventories. Refiners have been able to reduce the amount of material they run through refineries relatively quickly in response to falling demand, but crude oil production has not responded as quickly, leading to large crude oil inventory increases.