Hyperactive regional refineries and steady gasoline stocks have been enough to keep peak summer travel demand at bay, and Idahoans continue to share in the spoils.
Today, the Idaho average price for regular is $2.87, which is eight cents less than a month ago and 35 cents less than a year ago. Things are looking good in the Gem State, but they’re even better in other parts of the country. The U.S. average price is $2.64, which is 15 cents less than a month ago and 22 cents less than a year ago. Idaho currently ranks 8th in the country for highest gas prices.
“It’s unusual to see prices drop throughout the summer, especially when record-breaking numbers of people have traveled for most of the major holidays. But that’s exactly what’s happened in Idaho since Memorial Day,” says AAA Idaho spokesman Matthew Conde. “With kids going back to school and an upcoming switch to winter-blend fuel, prices could drop even further in coming weeks.”
Winter-blend fuel is cheaper to produce, in part because it doesn’t require certain additives that are necessary to prevent evaporation at hotter temperatures. The switch to winter-blend takes place every fall, and generally coincides with a drop in fuel demand after Labor Day.
In the Rockies region, refineries have maintained a frenetic pace during the summer months, and currently lead the nation with a 103 percent utilization rate. That’s important, because the region also has the smallest stock level for gasoline at 7.5 million barrels. Even a modest reduction in supply can put significant upward pressure on gas prices during the busy travel season.
Refineries can temporarily exceed a 100 percent utilization rate when they’re able to leverage unexpected efficiencies in the production process. But the trend will likely be short-lived, as most refineries tend to slow down their operations to complete seasonal maintenance during the switch to winter-blend fuel.
According to the Energy Information Administration, U.S. gasoline stocks increased by 4.4 million barrels last week, a surprising change on the national level.
The West Texas Intermediate price for crude oil was $57/bbl when the market closed on Tuesday, which is three dollars less than a month ago and ten dollars cheaper than a year ago. Industry experts continue to believe that there is an abundance of crude oil in the market, and that the global economy could slow down in the latter half of the year due to trade tensions between the United States and China.
According to recent reports, OPEC (Organization of the Petroleum Exporting Countries) is considering additional crude oil production cuts, which the group will discuss in December. If that happens, crude oil prices could jump to end the year. Hurricane season is off to a quiet start in the United States, but a severe weather event in the Gulf Coast or eastern seaboard could also push pump prices higher in the buildup to Labor Day.
“There are plenty of other ways that motorists can stretch their gas money,” Conde said. “If you aren’t going to use the cargo carrier on your roof rack any time soon, remove it to improve your vehicle’s aerodynamics. Bundle your errands, and carpool whenever possible.”