BOSTON -- As the fueling infrastructure works out the disruption from hurricanes Harvey and Irma, retail gasoline prices have dropped for two consecutive weeks.
The national retail average fell 6 cents per gallon (CPG) to $2.55, according to GasBuddy.
"For the second straight week, almost every state saw average gasoline prices fall notably as refineries continue to heal after Harvey and work on restoring production of motor fuels," said Patrick DeHaan, senior petroleum analyst for Boston-based GasBuddy. Even though oil prices have rallied to a four-month high recently, the national retail average should continue to drop another 5 to 10 CPG in the next week, according to GasBuddy.
According to the U.S. Energy Information Administration, refineries in the United States operated at 83.2% of operable capacity for the week ending Sept. 15, 2017, up from 77.7% the week earlier. This is still some distance from before Hurricane Harvey, when refineries were running at 96.6% operable capacity. Gasoline production was off 9.8 million barrels per day.
At the peak of the Hurricane Harvey-related refinery outages, almost 28% of U.S. refining capacity was offline, for a more than 2-million-bpd production deficit, GasBuddy noted.
As refineries continue to recover, gasoline prices in most regions should continue to drop. One exception: the Great Lakes region, where retailers in Michigan, Indiana, Ohio, Kentucky and Illinois have been slashing prices in a cycle of competition, and should soon "reset" prices to make up margin within the next few days.
The biggest week-over-week decreases in retail gasoline prices were in Delaware and Michigan, both off 10 CPG, according to GasBuddy. The next largest drops were in Maine and Indiana, both down 9 CPG, and Illinois, off 8 CPG. Kentucky, New Jersey and Ohio saw their retail averages decline 7 CPG.
The state with the lowest retail gasoline average as of Sept. 25 was Missouri at $2.28 per gallon, followed by Oklahoma ($2.29), Ohio ($2.30), Indiana ($2.33) and Arkansas ($2.34).
California had the highest retail average at $3.12 per gallon, followed by Hawaii ($3.06), Alaska ($3.04), Washington ($3) and Nevada ($2.92). Retail prices were up overall in the West Coast and Northeast because of pressured supply, but GasBuddy expects them to ease in the coming week.
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