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Morgantown, W.Va. – AAA reports that 113 million people will travel more than 50 miles for pleasure by the end of this year.
According to Gasbuddy.com Senior Petroleum Analyst Patrick de Haan, traveling over the Christmas holiday will be cheaper than last year’s $3.35 per gallon.
“Prices have dropped 10-cents a gallon across the state in the last week, with the average now at $3.23,” De Haan said. “We’re seeing gas prices continue to decline from coast to coast, with the national average at $3.19 a gallon.”
Refinery utilization for 2022 started at around 89%, but utilization has now risen to the 93% range. In addition, the price of a barrel continues to fall due to the increased supply of oil in the offshore market.
“Refineries have increased usage, inputting more oil into refineries after completing the maintenance season,” de Haan said. “This has helped gasoline supplies rise significantly.”
A recent meeting of the 23 oil-producing nations that make up OPEC+ did not increase output cuts of 2 million barrels per day. A report by the Energy Information Administration (EIA) indicated that domestic commercial crude supplies are about 14 million barrels lower than in November 2021.
“It was really surprising that OPEC+ didn’t cut production,” de Haan said. “They did in November, but they extended those cuts into December, but they didn’t increase the cuts, and I think that’s what gave oil prices a lot of ammunition to continue to sell off.”
Historically, diesel inventories have been low in the spring and fall due to low agricultural activity, but this fall production increased as supplies fell to their lowest level since 1982. De Haan said that if the temperature drops significantly, diesel prices will increase and if the market is stable, prices will rise. will decrease.
“Refineries are producing as much as they can because the price of diesel is relatively high,” de Haan said. “Now, has started to eliminate some shortages and diesel stocks 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 to decline.
“Definitely a nice slump there,” De Haan said. “I expect the statewide average for diesel to drop below $5. In fact, it should drop below $4.50, and it could go closer to $4 or $3.99 a gallon.
