MORGANTOWN, W.Va. — According to a report from AAA, an estimated 113 million people will travel more than 50 miles for pleasure through the end of the year.
Traveling over the Christmas holiday will be cheaper than the $3.35 per gallon last year, according to Senior Petroleum Analyst at Gasbuddy.com Patrick De Haan.
“The price is down statewide 10-cents a gallon in the last week, the average is now $3.23,” De Haan said. “That’s what we’re seeing coast-to-coast gas prices keep dropping and the national average is $3.19 a gallon.”
Refinery utilization for 2022 started at about 89% but utilization has now jumped into the 93% range. Additionally, increased oil supplies on the open market continue pushing the price per barrel down.
“Refineries have boosted utilization, inputting a lot more oil into refineries after concluding maintenance season,” De Haan said. “That’s helped gasoline supplies to jump significantly.”
In a recent meeting of the 23 oil producing countries that make up OPEC+ the 2 million barrel per day production cut was not increased. A report from the Energy Information Administration (EIA) said the domestic commercial crude supply is about 14 million barrels lower than November 2021.
“It was rather surprising that OPEC+ did not cut production,” De Haan said. “They did in November, but they simply extended those cuts into December, but they did not increase the cuts and I think that’s what gave a lot of ammunition to oil prices continuing to sell off.”
Historically, diesel inventories are low in the spring and fall due to increased agriculture activities, but this fall production ramped up because supplies dropped to lowest levels since 1982. De Haan said if temperatures drop significantly diesel prices will increase and if the market remains constant prices will continue to decrease.
“Because the price of diesel has been relatively high refineries have been producing as much as they can,” De Haan said. “Now, we’re starting to chip away at some of the deficits and diesel inventories have increased by 6 million barrels in the last week alone.”
De Haan said diesel fuel prices in West Virginia have dropped from $5.71 on Nov. 15 to $5.38 most recently. In the current market, De Haan expects diesel fuel prices to continue lower.
“Certainly a nice decline there,” De Haan said. “I do expect the statewide average for diesel will drop below $5. In fact, it should drop below $4.50 and it could head closer to $4 or even $3.99 a gallon.”