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New Year, New Decline in Gas Prices

Demand expected to dwindle in January, further driving down gas prices

01/02/19
Fuel

DENVER (Jan. 2, 2019) – Colorado motorists can expect to pay average of $2.24 per gallon this week, continuing the dramatic late-2018 decline in gas prices into the new year. That price is seven cents less than it was a week ago, 35 cents less than a month ago, and 24 cents less expensive than this time last year. Nationally, gas prices continued their decline to an average of $2.25 per gallon, with prices falling below $2 per gallon in nine states.


Heading into 2019, gasoline demand is expected to dwindle during the month of January, an expected change following the busy holiday travel season. At the same time, OPEC began its planned production cuts yesterday, with the hopes that the resulting shift in global supply will push oil prices higher. The effectiveness of the cuts will likely not be known until later in the first quarter.


"All eyes are on OPEC to kick off the year," said AAA Colorado spokesman Skyler McKinley. "There are two open questions: Whether they stick to their promise to cut crude production by 1.2 million barrels per day, and if the proposed cuts will be enough to restore balance to the market."

Over the past few years, OPEC and partnering countries have demonstrated a strong resolve to comply with proposed cuts in production. The cartel will likely reconvene in April, and if there is a need to further balance global supply and demand, OPEC will likely tweak current production numbers at that meeting.


Regional Trends
Gas prices for drivers in the Rocky Mountain region have dropped steadily over the past week, with increased refinery runs boosting regional supply. With no export outlets, the Oil Price Information Service reports that the region is most susceptible to "clearance sales" on gasoline when inventories inflate. Currently, three states in the region are on the top-10 list of largest declines for the week: Montana (-11 cents), Wyoming (-9 cents), and Idaho (-9 cents). 

Oil Market Dynamics
At the close of Monday's formal trading session on the NYMEX, WTI decreased 62 cents to settle at $44.60. Oil prices mostly fell last week, reaching their lowest since the third quarter of 2017, as market observers have concerns that the global crude market is oversupplied. Complicating the picture, according to the latest weekly petroleum status report from the Energy Information Administration, total domestic crude inventories took a slight step back last week. At 441.5 million barrels, crude inventories fell by 500,000 barrels. When compared to last year at this time, combined inventories across the country are still 5 million barrels higher this year.

To reduce the oversupply of crude globally, last month OPEC and non-OPEC producers, including Russia, announced that beginning in 2019, they will reduce crude production by 1.2 million barrels per day (for an initial six-month period). This move could drive crude oil prices up, and in turn drive gas prices higher in the New Year -- though not immediately. 

Colorado Gas by the Numbers

Denver

  • Current Average: $2.13
  • Yesterday Average: $2.14
  • Week Ago Average: $2.20
  • Month Ago Average: $2.47
  • Year Ago Average: $2.35


Boulder-Longmont

  • Current Average: $2.13
  • Yesterday Average: $2.13
  • Week Ago Average: $2.20
  • Month Ago Average: $2.48
  • Year Ago Average: $2.38


Colorado Springs

  • Current Average: $2.18
  • Yesterday Average: $2.19
  • Week Ago Average: $2.27
  • Month Ago Average: $2.50
  • Year Ago Average: $2.30


Greeley

  • Current Average: $2.18
  • Yesterday Average: $2.19
  • Week Ago Average: $2.26
  • Month Ago Average: $2.58
  • Year Ago Average: $2.38


Fort Collins-Loveland

  • Current Average: $2.25
  • Yesterday Average: $2.25
  • Week Ago Average: $2.31
  • Month Ago Average: $2.56
  • Year Ago Average: $2.39


Grand Junction

  • Current Average: $2.40
  • Yesterday Average: $2.40
  • Week Ago Average: $2.47
  • Month Ago Average: $2.79
  • Year Ago Average: $2.48


Pueblo

  • Current Average: $2.44
  • Yesterday Average: $2.43
  • Week Ago Average: $2.47
  • Month Ago Average: $2.62
  • Year Ago Average: $2.40


Durango

  • Current Average: $2.46
  • Yesterday Average: $2.47
  • Week Ago Average: $2.47
  • Month Ago Average: $2.70
  • Year Ago Average: $2.45


Glenwood Springs

  • Current Average: $2.55
  • Yesterday Average: $2.55
  • Week Ago Average: $2.67
  • Month Ago Average: $2.97
  • Year Ago Average: $2.75


Vail

  • Current Average: $2.73
  • Yesterday Average: $2.79
  • Week Ago Average: $2.87
  • Month Ago Average: $3.07
  • Year Ago Average: $2.93


About AAA Colorado

More than 685,000 members strong, AAA Colorado is the state's most-trusted advocate for the safety and security of all travelers. As North America's largest motoring and leisure travel organization, AAA provides more than 58 million members with travel, insurance, financial, and automotive-related services - as well as member-exclusive savings. For more information, visit AAA.com.