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Pump Prices Could Fall Below $2 in the U.S. South, Analysts Say

Published 23/08/2019, 11:00
© Reuters.  Pump Prices Could Fall Below $2 in the U.S. South, Analysts Say
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(Bloomberg) -- Pending a hurricane, it might get a lot cheaper to head out to big college football games this fall across the southern U.S.

GasBuddy fuels analyst Patrick DeHaan said about 100 of the nation’s 150,000 gas stations have regular unleaded below $2 per gallon this week. He said the number of stations dipping below that threshold probably could peak at 20,000 to 25,000 this fall -- about 15% of the total -- if no sudden market drivers emerge.

Auto club AAA said in a note Thursday that the South and Southeast have potential for $2-per-gallon retail gasoline in the next few months with U.S. refineries running hard and crude getting cheaper. That’s on top of waning end-of--summer demand and a shift to a cheaper blend of winter gasoline.

The auto club placed the national average retail price at $2.60 per gallon, down from $2.83 a year ago. It sees the national average falling to $2.40 this fall.

Refinery runs have added to stockpiles and cut support. U.S. refinery utilization has increased 6 percentage points since May 17 to 95.9% in the week ending August 16, Energy Information Administration data showed.

Mississippi was at an average of $2.23 a gallon Thursday, according to AAA. But at least one gas station is ahead of the trend, cutting prices to $1.99 a gallon Monday because it is on a competitive corner.

“I can’t tell you how many people have come in here and said to me, ’You know how long it has been since I saw $2 gasoline?’ They are thinking, holy moly, this must be a good deal,” said Anthony Spiriti, manager of the Mom and Pop Quick Stop in Pascagoula.

Drivers right now are benefiting from the shift by refineries next month to fall blend gasoline, which is cheaper to make. Families are shifting out of vacation mode, reducing demand.

“Everyone is summered out right now,” DeHaan said.

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