Monday, September 21, 2020

Gasoline demand, prices likely to slip in Idaho

As the summer draws to a close, fuel demand is starting to slip in Idaho and across the country, and gas prices along with it. According to AAA, the average price in the Gem State dropped two cents on the week, while the U.S. average was down three cents.

And there’s more good news on the horizon – soon, refiners and retailers will be making the switch to winter-blend fuel, which requires fewer additives and is cheaper to produce than summer blend.
Barring an unexpected supply issue related to wildfires or Tropical Storm Sally in the Gulf Coast, pump prices are expected to continue their slow descent this week.

"'Never say never' seems like an appropriate reaction for just about everything in 2020, but if we follow the normal trend, the most expensive gas prices of the year are already well behind us,” says Matthew Conde, AAA Idaho public affairs director. “It may take a little time for the last of the summer-blend fuel to work its way through the system, but when it does, we could see gas prices drop all the way to Thanksgiving.”

Today, the Idaho state average for regular fuel is $2.45, which is two cents higher than a month ago, but 31 cents cheaper than a year ago. Meanwhile, the current U.S. price is $2.19, which is a penny higher than a month ago, but 38 cents less than a year ago. Idaho ranks 9th in the country for most expensive gas prices, which is typical for our state.

The Energy Information Administration reports that national gasoline demand currently sits at 8.3 million barrels per day. Even though stock levels dropped by nearly three million barrels this week to 231 million bbl, that’s still a surplus of three million barrels over last year. In the Rockies region, stock levels actually increased on the week by 400,000 barrels to reach 7.4 million barrels on hand.

With an 86 percent utilization rate, Rocky Mountain refineries are currently some of the most active in the country, trailing only the Midwest region. As long as regional refineries stay busy and finished gasoline supplies continue to grow, Idaho prices are likely to stabilize or even decrease.

Tropical Storm Sally and the devastating wildfires in the West could delay fuel deliveries in some areas, but at this time, disruptions are expected to be temporary and site-specific.

“The United States is currently producing 10.3 million barrels of crude oil per day, compared with 12.4 million a year ago,” Conde said. “With fewer opportunities for people to travel for business or pleasure, commute, or even take kids to school, there’s less demand for some finished products like gasoline and jet fuel.”

After being distilled at a refinery, the average 42-gallon barrel of crude oil produces 20 gallons of gasoline, 11 gallons of diesel, and 4 gallons of jet fuel, among other things.

Here’s a sampling of gas prices around the Gem State as of Sept. 14:

  • Boise – $2.48

  • Coeur d’Alene – $2.33
Franklin – $2.44

  • Idaho Falls – $2.34
Lewiston – $2.43
Pocatello – $2.46
Twin Falls – $2.45