AAA: Gas Prices Drop in Western Kentucky; Crude Prices Remain High

Gas prices in West Central Kentucky are seven cents cheaper this week at $2.863, according to AAA East Central’s Gas Price Report.

This week’s average prices: Western Central KY Average                        $2.863
Average price during the week of September 20, 2021                              $2.937
Average price during the week of September 28, 2020                              $1.977
 
Average prices of unleaded self-serve gasoline in various areas: 

$2.984        Bowling Green
$2.818        Elizabethtown
$2.969        Louisville
$2.747        Owensboro
$2.799        Paducah

Trend Analysis:

Fall has arrived, but gas prices are still reflecting higher summertime levels instead of taking a seasonal dip. The national average dropped just a penny on the week to $3.18 after matching a seven-year-high in the prior week. The big culprit keeping pump prices high is the price of crude oil, which is above $73 per barrel.

This time of year, consumers typically see some relief at the pump. However, with approximately 16% of crude production in the Gulf of Mexico still shut down because of Hurricanes Ida and Nicholas and the concerns about what higher COVID cases could do to the economy, oil prices remain elevated.

According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks increased by 3.5 million barrels to 221.6 million barrels last week. Gasoline demand remains low at 8.90 million barrels per day, helping to offset some of the upward pressure caused by higher crude oil prices. With the hurricane recovery and restoration process continuing, pump prices may stabilize. However, high crude prices (above $72 per barrel) will contribute to gasoline prices likely remaining elevated this fall.

At the close of Thursday’s formal trading session, WTI increased by 68 cents to settle at $73.98. Crude prices increased on the week following the release of EIA’s recent report showing that total domestic crude inventories decreased by 3.4 million barrels to 414 million barrels. Additionally, crude prices rose after the Federal Reserve signaled it could raise interest rates in 2022 and end its bond-purchase program that has supported the economy since the start of the COVID-19 pandemic. For this week, crude prices could continue to climb if EIA’s next report shows another weekly decline.