Average fuel prices in the United States fell in the first week of 2019 for a 12th consecutive week amid a large build-up of inventories. Photo by John Angelillo/UPI | License Photo
Jan. 8 (UPI) -- Gasoline prices in the United States have now fallen for 12 straight weeks, with the national average as of Monday at $2.24 per gallon, alongside reports indicating the weakest demand since February 2017.
As of January 7, gas prices have dropped from the end of the year, and 20 cents from a month ago. They are a quarter of a dollar lower year-over-year, the AAA said Monday in a report.
"Despite record motor vehicle travel for the holiday, demand was down nearly 900,000 barrels, suggesting that demand this winter could be lower than expected," the AAA said.
The AAA noted that the "Energy Information Administration data registers gasoline demand at 8.6 million barrel per day for the week ending December 28 -- the lowest level on record since February 2017."
Drivers in the Rockies region saw the biggest decreases in the country, led by a 9-cents-per-gallon drop in Montana, as refinery utilization jumped six percent on the week. Gasoline stocks increased 252,000 barrels in the week.
"With the declines, state gas price averages are inching toward all being close to or below the $2.50 per gallon mark," the AAA said.
Gasoline stocks also continued to build in the Great Lakes and Central region, with nine states there among the ten seeing the biggest year-over-year declines nationwide.
"The trend is expected to continue into the early half of the year," the AAA said.
Fuel prices in the region range from $2.20 per gallon in North Dakota to $1.82 per gallon in Missouri, which has the lowest average price in the United States.
In the South and Southeast, gasoline stocks saw the largest weekly build of all regions, as 3.5 million barrels were added to a total 89.2 million barrels of gasoline stocks, an all-time record.
In the Mid-Atlantic and Northeast, gasoline prices dropped three to five cents on the week, but states like Connecticut and New York, both averaging $2.58 per gallon, saw the most expensive gasoline in the region.
The Mid-Atlantic and Northeast is seeing prices about 15 cents per gallon lower than last year. Despite a gasoline stock build-up by 724,000 barrels, analysts considered it a low build for the region.
In the West Coast, states in the region, as usual, landed on the most expensive list.
California, which has stricter emission controls than most of the rest of the United States, leading to higher costs, is the nation's most expensive market with gasoline with prices there averaging $3.32 per gallon.
"While expensive, prices are decreasing, with all state averages moving lower on the week," the AAA said.
Fuel sold in service stations across most of the United States is a combination of either RBOB, Reformulate Gasoline Blendstock for Oxygenate Blending, or CBOB, Conventional Blendstock for Oxygenate Blending. Some states use RBOB and others CBOB. California mandates a special formula named CARBOB.
These blendstock products are all naphtha obtained from crude oil. The naphtha is in most cases later mixed with about 10 percent ethanol, which is an oxygenate added so that the ending emission is cleaner.
RBOB gasoline futures for February delivery were quoted Tuesday morning at $1.34 per gallon. This compares with $1.38 per gallon on December 18 for January delivery.
Ethanol, which is alcohol that in the U.S. is mostly derived from corn, was quoted early Tuesday at $1.28 for February delivery. This compares with $1.26 per gallon for January delivery a week earlier.