Fuel prices down for eighth straight week, and two cents lower than a year ago

Dec. 4 (UPI) -- U.S. fuel prices on Tuesday were lower than a year ago for the first time in 18 months, with the national average sitting at $2.46 per gallon -- 2 cents below last year.

The last time prices were cheaper year-over-year was in early July 2017, when they were $2.24 per gallon, compared with $2.26 per gallon in July 2016, the drivers' organization AAA said.

Fuel costs for drivers "also is 31 cents cheaper than a month ago and, on the week, 24 states saw gas prices drop double digits," AAA said.

According to GasBuddy, which also tracks U.S. fuel prices, the national average fuel price was $2.43 per gallon, or 10 cents less than a week earlier. At least one fuel station in 27 states is offering fuel at $1.99 per gallon or under.

GasBuddy analyst Patrick de Haan said the drop of 50 cents per gallon since October has led to significant savings.

"The national average stands at its lowest point of 2018 having fallen nearly 50 cents since the start of October, keeping nearly $200 million in the pockets of Americans every single day," de Haan said.

Gas prices fell fastest in the Great Lakes and Central area, with a 15-cent weekly decline in Ohio, which led price decreases nationwide. As many as 11 states in this area saw double-digit drops, it added. Stocks in that area built up during all of November, the AAA said.

In the South and Southeast, there was an inventory drawdown of nearly one million barrels due to increasing exports, the AAA said. "With [refinery] utilization up, stocks are likely to build in the coming week and keep pump prices low," it said.

Drivers in this area are seeing the biggest month-on-month price declines. Oklahoma and Georgia led monthly declines as prices there dropped 39 cents and 37 cents, respectively, AAA said.

Refinery utilization is also higher in the Mid-Atlantic and Northeast region, "indicating that a large build could be coming in the week ahead" and reduce prices even further. At $2.20 per gallon, Delaware has the cheapest fuel price average of any state in the Mid-Atlantic and Northeast.

In the Rockies, the situation was different because while prices were anywhere from 3 to 10 cents cheaper than last month, they "are much more expensive year-over-year." Prices in Utah were 35 cents per barrel above a year earlier, according to the AAA.

"The good news is prices are falling," the AAA said. At $2.58 per gallon, Colorado saw the largest weekly pump price drop in the region.

In the West Coast, which AAA uses to designate also the nation's most expensive market, Hawaii, with fuel prices at $3.64 per gallon, price levels are also seeing a fast decline.

Hawaii saw an 11-cent weekly decline, followed by California, with an 8-cent weekly decline. Inventory levels in the West Coast are 1.8 million barrels lower than last year, "which could cause prices to spike if there is a supply challenge in the region," the AAA said.

The direction that fuel prices could take in coming weeks will depend, in part, on the results of an OPEC meeting scheduled for Thursday where producing nations could agree on a production cut, the AAA said.

"Last week crude dropped to its lowest point of the year at $50 per barrel. However, this week's OPEC meeting could cause crude oil prices to jump if the organization decides to reduce crude production," said AAA official Jeanette Casselano, referring to West Texas Intermediate futures prices.

"Americans will likely see falling prices at least for one more week," De Haan said.

Fuel sold in service stations across most of the United States is a combination of RBOB, or reformulate gasoline blendstock for oxygenate blending, which is naphtha obtained from crude oil, that is later mixed with about 10 percent ethanol in most cases.

RBOB gasoline futures for January delivery were quoted early Tuesday in the CME exchange at $1.47 per gallon, up from $1.43 per gallon a week earlier.

Ethanol, which is alcohol derived from corn and mainly used to improve the fuel's environmental impact as it adds oxygen, was quoted early Tuesday at $1.28 per gallon for January delivery, This compares with $1.25 per gallon, but for December delivery, a week earlier.