Richmond, Virginia (March 21, 2022) – After hitting a record $4.33 on March 11, the national average for a gallon of gasoline has fallen to $4.25, down seven cents in just the past week – the largest weekly drop since January. Better yet, the average price of gas here in Virginia fell 13 cents on the week, one of the largest drops in the country.
The primary reason for the drop in gas prices is the falling price of crude oil. Crude peaked shortly after Russia launched its war in Ukraine, but has since fallen more than $20, hovering near $105/bbl. Another factor domestically may also be a slight drop in demand. Demand is defying what is typically an upward trend at this time of year, dipping slightly on the week, perhaps because of higher prices at the pump.
“With warmer weather and longer days, we typically see an uptick in gasoline demand at this time of year but last week we saw a drop in demand instead,” says Morgan Dean, spokesperson for AAA Mid-Atlantic. “In a recent AAA survey, 59% of drivers said they would change their driving habits or lifestyle if the cost of gas hit $4 per gallon, so the slight decrease makes sense.”
The average price of gas in Virginia, now at $4.10, dropped 13 cents on the week, one of the top ten largest decreases nationwide. However, the average price is still up considerably from a month ago when it was $3.39 and a year ago at $2.75.
While this is great news for drivers, there is no guarantee, at this moment, that the worst is behind us.
“There is no telling, at this point, whether this downward trend will continue, or for how long, because of the unpredictable nature of the war in Ukraine and other geo-political influences,” Dean adds. “But, for the moment anyway, there is hope that the worst is behind us.”
For more information on the latest AAA gasoline survey, visit here.
According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks fell by 3.6 million bbl to 241 million bbl last week. Gasoline demand also decreased slightly from 8.96 million b/d to 8.94 million b/d. The drop in gas demand is contributing to price decreases, but the recent reversal in oil prices is creating downward pressure on pump prices. If the oil price continues to decline, pump prices will likely follow suit. However, should oil prices start to climb again, pump prices will likely follow.
Today’s national average for a gallon of gas is $4.25, which is seven cents less than a week ago, 72 cents more than a month ago, and $1.37 more than a year ago.
Quik Stats
The nation’s top 10 largest weekly decreases: Maryland (−46 cents), Delaware (−20 cents), Florida (−18 cents), Georgia (−17 cents), Washington, D.C. (−14 cents), Connecticut (−13 cents), Virginia (−13 cents), Rhode Island (−13 cents), New Jersey (−12 cents) and Alabama (−10 cents).
The nation’s top 10 most expensive markets: California ($5.85), Nevada ($5.11), Hawaii ($5.08), Washington ($4.72), Oregon ($4.70), Alaska ($4.69), Arizona ($4.61), Illinois ($4.50), New York ($4.36) and Washington, D.C. ($4.36).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI increased by $1.72 to settle at $104.70. After crude prices spiked in response to Russia’s invasion of Ukraine, crude prices changed course in reaction to China announcing new lockdowns alongside rising COVID-19 infection rates last week. However, crude prices could increase further this week as E.U. foreign ministers, who will meet Monday in Brussels, decide whether the 27-nation bloc should join the United States in banning Russian energy imports, including crude oil. Additionally, EIA reported that total domestic crude stocks increased by 4.3 million bbl to 415.9 million bbl last week.
AAA has a variety of resources to help motorists save on fuel:
Fuel Price Finder (http://www.AAA.com/fuelfinder) locates the lowest fuel price in your area.
AAA Gas Cost Calculator (http://gasprices.aaa.com/aaa-gas-cost-calculator/) helps budget travel expenses.
TripTik Mobile (http://www.aaa.com/mobile) plots fuel prices along your travel route.