Houston — Automotive club AAA says that the average pump price for standard grade gasoline across the US on Monday was lower than it was one year ago, a first in 18 months. This view lines up with a Tuesday analysis of data from DTN published daily by S&P Global Platts, which showed that rack prices in multiple US cities hit multi-year lows at the end of November.
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AAA reports the national average price for standard grade gasoline at $2.46/gal Monday, two cents below the year-ago price. The same data showed the national pump price was 31 cents/gal cheaper than a month ago and that 24 states saw gas prices drop double digits in the past week.
AAA attributes this trend to weaker oil markets. "Cheap crude oil prices are driving fuel savings at the pump," Jeanette Casselano, AAA spokeswoman, said in a company blog post. "Last week, crude dropped to its lowest point of the year; however, this week's OPEC meeting could cause crude oil prices to jump if the organization decides to reduce crude production."
While Platts does not calculate an average pump price for the US, rack price data from DTN for key US cities seems to gel with AAA's view.
On November 29, the rack price for unleaded, unbranded gasoline in Houston and Chicago hit $1.3606/gal and $1.4072/gal, respectively, their lowest reported levels since November 2016. On the same day, the same rack price in New York City was reported at $1.464/gal, its lowest level since June 2017. Rack prices in these cities have recovered slightly in the first days of December, but still remain below historic norms.
Gasoline prices are so weak now that some US gasoline cracking margins have flipped to negative. The crack spread between NYMEX RBOB futures in New York Harbor and Brent crude oil futures has been negative since the end of October, Platts data showed. In Houston, the WTI to conventional grade gasoline cracking margin averaged less than $2/b in November after averaging more than $12/b in November 2017.
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