MORGANTOWN, W.Va. — According to a report from AAA, an estimated 113 million people will travel more than 50 miles for pleasure by the end of the year.
Driving through the Christmas holiday will be cheaper than $3.35 per gallon last year, according to Gasbuddy.com Senior Petroleum Analyst Patrick De Haan.
“The price is down 10 cents a gallon nationwide in the last week, the average is now $3.23,” De Haan said. “That’s what we’re seeing coast to coast gas prices continue to fall and the national average is $3.19 a gallon.”
Refinery utilization for 2022 started at around 89%, but utilization has now moved into the 93% range. Also, the increase in oil supplies in the open market continues to affect the decrease in the price per barrel.
“Refineries have increased utilization, putting much more oil into the refinery after the maintenance season ends,” De Haan said. “This has helped gasoline supplies increase significantly.”
At a recent meeting of the 23 oil-producing nations that make up OPEC+, the 2 million bpd production cut was not increased. A report from the Energy Information Administration (EIA) said domestic commercial crude supplies are about 14 million barrels lower than November 2021.
“It was quite surprising that OPEC+ did not cut production,” De Haan said. “They did in November, but they just extended those cuts into December, but they didn’t increase the cuts, and I think that’s what gave a lot of ammunition to oil prices that continued to sell off.”
Historically, oil inventories are low in the spring and fall due to increased agricultural activity, but this fall production increased as supplies fell to their lowest levels since 1982. De Haan said if temperatures drop sharply oil prices oil will increase and if the market remains constant prices will continue to decrease.
“Because the price of oil 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 deficit, and oil inventories are up 6 million barrels in the last week alone.”
De Haan said West Virginia diesel fuel prices have dropped from $5.71 on Nov. 15 to $5.38 recently. In the current market, De Haan expects diesel fuel prices to continue lower.
“Definitely a good drop there,” De Haan said. “I expect the nationwide average for oil to drop below $5. In fact, it should drop below $4.50 and could go closer to $4 or $3.99 a gallon.”