Lexington sees big jump at the pump
Published 12:27 pm Friday, January 24, 2020
LEXINGTON, Ky. — While most of the country is enjoying steady or declining prices at the pump, that’s not the story everywhere in the Bluegrass.
The national gas price average is $2.54, which is three cents cheaper than last week and a penny less than last month, yet 30-cents more than a year ago. Gas prices edged cheaper in the last week as gasoline stocks grew, measuring at 258 million barrels—a stock level not recorded by the Energy Information Administration (EIA) in nearly a year.
While prices have remained mostly steady on average across the Commonwealth, it’s a different story locally in Lexington where pump prices soared 14 cents overnight, jumping from $2.19 yesterday to $2.33 today. AAA gas prices reflect actual prices paid at the pump, as opposed to customers inputting into an app what they paid. Because of this, the averages are an accurate representation of prices paid.
“Motorists across the country are paying less to fill up, as U.S. gasoline supply outpaces demand this winter,” said Lori Weaver Hawkins, public and government affairs manager, AAA Blue Grass. “Here in Kentucky, we’re seeing the average hold mostly steady so far, but in Lexington, prices at the pump took a sharp jump overnight.”
Nationally, gas prices are $2.50 or less at 61% of gas stations in the country. Weaver Hawkins says there are no supply issues or refinery problems causing price spikes locally. “Unfortunately, these kinds of price fluctuations occur from time to time, particularly in parts of Kentucky, Ohio, Indiana and Michigan. Despite strong supplies and lower demand, a gas station may decide to increase its price and before you know it, there’s a domino effect with all the stations in the city increasing their price as well.”
She says the good news for Lexington motorists is that this sort of price fluctuation is likely to be short-lived and the trend should be toward a decline in prices in the coming weeks amid lower demand and plentiful supplies.
Most of central region sees lower prices
Kentucky appears to be a bit of an outlier in the central U.S., with the average price in the Commonwealth just a penny less than a week ago and 2 cents higher than yesterday. Michigan led the nation in week-over-week decreases, with the average price at the pump dropping 10 cents. Meanwhile, Indiana saw its average price drop 9 cents week to week, while Illinois saw a 6 cent drop.
Although many motorists in the region are paying less compared to last week to fill up, they are paying a lot more compared to this time last year. Gas prices are at least a quarter more expensive across the region, with Ohio (+54 cents) having the largest year-over-year difference. Kentucky is paying 25 cents less than a year ago.
Regional gasoline stocks built by 1.5 million barrels, according to the EIA, bumping totals to 56.5 million barrels. Stocks have been steadily building since mid-November and are at the highest level for the region in 10 months. Typical local fluctuation aside, gas prices are poised to continue to edge cheaper through the end of the month.
Oil Market Dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI increased by two cents to settle at $58.54. Crude prices fell last week after new data showed that China’s economy, the world’s second largest, grew by 6.1 percent in 2019. It is the country’s slowest expansion in 29 years. The slower-than-expected growth rate has increased market concerns that global crude demand may decline this year. If those concerns continue into this week, crude prices could decrease again.
In related news, EIA’s weekly report that showed total domestic crude inventories decreased by 2.5 million barrels. The current crude stock level, 428.5 million barrels, is 8.5 million barrels lower than the level at this same time last year.
Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.
AAA provides automotive, travel, and insurance services to 60 million members nationwide and more than 685,000 members in Kentucky. AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years. AAA is a non-stock, non-profit corporation working on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel, and track their roadside assistance service with the AAA Mobile app (AAA.com/mobile) for iPhone, iPad and Android. For more information, visit www.AAA.com.