LEXINGTON, Ky. — Pump prices continue to increase across the country with nearly every state’s average pushing more expensive on the week, on average by four cents. At the start of the Memorial Day work week, the national gas price average is $1.87.
In Kentucky, pump prices remained mostly steady with the average across the Commonwealth for a gallon of regular unleaded increasing by just 3 cents compared to last week, landing at $1.67.
Historically low Memorial Day gas prices
The last time the national gas price average leading into the holiday was under $2/gallon was 17 years ago in 2003. That year motorists paid, on average, $1.50 to fill-up. Gas prices this year won’t be as cheap as 2003, but today’s national average is a dollar cheaper than one year ago.
“Gas prices around Memorial Day have not been this cheap in 17 years. However, as the country continues to practice social distancing, this year’s unofficial kick-off to summer is not going to drive millions of Americans to travel, like we normally see,” said Lori Weaver Hawkins, manager, public and government affairs. AAA Blue Grass. “Despite inexpensive gas prices, AAA anticipates this year’s holiday will likely set a record low for travel volume.”
For the first time in 20 years, AAA will not issue a Memorial Day travel forecast due to COVID-19 impacts on the underlying economic data used to create the forecast.
Americans can expect gas prices to continue to push more expensive, possibly hitting $2/gallon in the next few weeks. This is mostly due to demand increasing as states re-open.
This week will also bring the Environmental Protection Agency’s waiver on the sale of winter-blend gasoline to an end. Stations will switch over to summer-blend gasoline, which has a lower Reid Vapor Pressure to prevent excessive evaporation when outside temperatures rise.
Typically, the switchover to summer-blend can cause gas prices to spike during the summer driving season, but that will likely not be the case this year due to the impact of COVID-19 on demand and crude oil prices.
Prices around the Bluegrass
Today’s average in Kentucky is down 19 cents from a month ago and over a dollar lower than the average of $2.68 seen a year ago. In Lexington, the average price is now $1.60, just 2 cents higher than last week, but 19 cents higher than last month.
In Nicholasville, the average price is holding steady at $1.58, while the average remains at $1.61 in Georgetown. Versailles is also steady at $1.59 and Winchester’s average today is steady at $1.57. Richmond is up a penny at $1.66.
The nation’s top 10 largest weekly increases are: Idaho (+17 cents), Pennsylvania (+8 cents), Wisconsin (+7 cents), Iowa (+7 cents), Colorado (+7 cents), Kansas (+7 cents), Maryland (+6 cents), Utah (+6 cents), Nebraska (+5 cents) and Minnesota (+5 cents).
The nation’s top 10 least expensive markets are: Mississippi ($1.51), Arkansas ($1.52), Oklahoma ($1.52), Missouri ($1.54), Texas ($1.56), Alabama ($1.57), Kansas ($1.57), South Carolina ($1.60), Louisiana ($1.60) and Tennessee ($1.62).
Great Lakes and Central States
The nation’s largest weekly gas price increases can be found for a second week in the Great Lakes and Central States region. Kentucky was one of the few exceptions, as five states from the region land on the top 10 list for largest jumps, though this week’s increases are less than a dime: Wisconsin (+7 cents), Iowa (+7 cents), Kansas (+7 cents), Nebraska (+5 cents) and Minnesota (+5 cents).
With increases over the last two weeks, Illinois ($2.13) is the only state in the region whose average has jumped back over $2/gallon. At $1.86, Indiana carries the second most expensive average in the region, while Missouri ($1.54) touts the cheapest.
The Energy Information Administration (EIA) reports that regional gasoline stocks have decreased for six straight weeks, bringing total stock levels down to the lowest measurement of the year at 54 million barrels. However, stocks remain above the year-ago level of 49.5 million barrels and the five-year average of 52.6 million barrels.
Oil Market Dynamics
At the end of Friday's formal trading session, West Texas Intermediate, a grade of crude oil used as a benchmark in oil pricing, increased by $1.87 cents to settle at $29.43 per barrel. Crude prices increased last week amid growing market optimism that crude demand continues to rebound as more states re-open and demand for gasoline has grown in recent weeks.
For this week, crude prices may continue to rise if the market believes that the 9.7 million barrels per day production reduction agreement for May and June 2020 between the Organization of the Petroleum Exporting Countries and other major crude exporters, including Russia, is helping to rebalance the global oil market as demand remains low due to COVID-19.
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.
Press release from AAA.