LEXINGTON, Ky. — With the average price at $1.43, Kentucky is the sixth lowest gas market in the nation, as prices at the pump continue their downward spiral amidst weakened demand.
“AAA forecasts that the national average will continue to decrease into next month, possibly dropping as low as $1.65,” said Lori Weaver Hawkins, public and government affairs manager, AAA Blue Grass. “We haven’t seen gas prices that cheap since January 2009.”
The average in Kentucky is down 30 cents from a month ago and considerably lower than the average of $2.73 seen a year ago. In Lexington, the average price is now $1.38, down 31 cents from last month.
In Nicholasville, the average price is at $1.34, while the average is down to $1.23 in Georgetown. Versailles is at $1.37 and Winchester’s average is higher at $1.46. Richmond is at $1.63.
As gas prices continue to push cheaper across the country, only one dozen states carry an average of $2/gallon or more. The national average is $1.77, which is four cents less than last week, 28 cents cheaper than last month and $1.11 less than a year ago.
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Crude oil prices were extremely volatile last week, pushing negative for the first time ever, but they did make significant gains to end the week in the positive. The Energy Information Administration (EIA) reported demand at 5.3 million barrels a day, a slight increase, but still an extremely low rate compared to last April’s 9.45 million barrels per day average. Low demand pushed gasoline stocks to increase for yet another week, this time by 1 million barrels to put total U.S. stock levels at 263 million barrels.
Start of reopening the economy
Some states could see some minimal fluctuation at the pump in coming weeks if demand jumps as business are given the green light to re-open. However, this will not have a large impact for the majority of the nation’s motorists. In Kentucky, the gradual, phased approach to reopening businesses is not expected to cause any immediate spikes in demand.
The nation’s top 10 largest weekly decreases are: Alaska (-9 cents); Idaho (-8 cents); Arizona (-7 cents); Utah (-7 cents); Montana (-6 cents); Oregon (-6 cents); Michigan (-6 cents); Missouri (-6 cents); Washington (-5 cents); and South Dakota (-5 cents).
The nation’s top 10 least expensive markets are: Wisconsin ($1.19), Oklahoma ($1.36), Ohio ($1.38), Michigan ($1.40), Arkansas ($1.42), Kentucky ($1.43), Indiana ($1.44), Missouri ($1.46), Iowa ($1.47) and Mississippi ($1.49).
Great Lakes and Central States
The cheapest gas price averages can be found in the Great Lakes and Central States region. Seven states from the region land on the top 10 list for cheapest averages in the country: Wisconsin ($1.19); Ohio ($1.38); Michigan ($1.40); Kentucky ($1.43); Indiana ($1.44); Missouri ($1.46); and Iowa ($1.47). On the week, state gas price averages decreased as much as a nickel in the region.
Regional gasoline stocks decreased in EIA’s latest report while regional refinery utilization held steady. Stocks drew by 1.7 million barrels to total 58.4 million barrels. Refinery rates were stable at 65 percent, though down significantly compared to rates this time last year of 92 percent.
Oil market dynamics
At the end of Friday’s formal trading session, West Texas Intermediate, the grade of crude oil used as a benchmark in oil pricing, increased by 44 cents to settle at $16.94 per barrel. Crude prices have recovered after turning negative last week for the first time since trading in 1983. Last week’s decline in prices has been attributed to many factors, including the inability of market traders who owned oil futures to find other market participants to sell their futures contracts to and limited available crude storage options.
Crude prices started to push more expensive by the end of last week in response to reports of the Organization of the Petroleum Exporting Countries reducing crude output before the May 1 start date of its 9.7 million b/d production reduction agreement for May and June 2020. Crude prices will likely remain volatile this week, as the market continues to assess how much crude demand will continue to fall during the ongoing pandemic.
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.
AAA provides automotive, travel, and insurance services to 60 million members nationwide and more than 630,000 in Kentucky. AAA is non-stock, non-profit corporation that advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years.