During the last year, the U.S. gasoline prices dropped to multiyear lows of $2,17 per gallon, this is equivalent to 44 cents lower than in 2019 and the lowest annual average since 2016, the Energy Information Administration informed this Wednesday.
According to the agency, at the beginning of 2020, prices were around $2,50 per gallon, still, the covid-19 pandemic brought a demand destruction that prompted them down. Lockdowns throughout the country and restricting travelling measures were also factors for the decrease.
In March, when the national emergency was declared, gasoline prices averaged $2,38 per gallon, and kept dropping for several weeks, reaching historic lows of $1,77 per gallon on late April. This was the lowest drop since 2016, according to EIA.
In that same month, due to the lockdown period, vehicle travel fell to the lowest record in history, according to Bureau of Transportation Statistics’ data, which goes back to 2000.
In May, those indicators began to increase, in comparison with the prior month’s levels. “From May through the end of the summer, U.S. gasoline inventories remained high because of sustained lower demand; even as refiners reduced gasoline production because of lower margins,” EIA report explains.
Low gasoline prices all over the country during 2020
As we have reported previously, there was a forecast of low fuel prices nationwide. EIA’s estimations pointed to a mark below the $2 per gallon for all over the country. This trend continued for the most of 2020.
“Fuel prices in Boston, Chicago, Cleveland, and San Francisco reached their annual lows on April 27; in Denver, Los Angeles, New York, and Seattle reached their annual lows the following week, on May 4. The lowest gasoline prices of the year in the remaining two cities (Houston and Miami) occurred two weeks later, on May 18,” EIA explains.
Then, in the week prior to thanksgiving, they dropped to a new low record of $2,10 per gallon; the lowest point since 2015, according to EIA.
Low oil crude prices was the main factor for the decrease; as the price of crude oil represents half of the total price per gallon of gasoline; therefore, crude oil represent the most variable portion for gasoline final prices.
Now, the outlook for U.S. gasoline may look a little brighter, as crude oil prices have started to increase to their highest point since February of 2020.