Gas Prices Retreat Amid Fears of COVID-19 Resurgence

National average drops 4 cents, Kentucky drops another 3 cents on the week

LEXINGTON, Ky. — Pump prices continue to tumble as oil prices drop to lows not seen since August amid fears of a COVID-19 fueled economic slowdown.

The national average for a gallon of gas dipped 4 cents on the week to $3.35, the lowest national average in a month and a half. Today's national average of $3.35 is seven cents less than a month ago and $1.19 more than a year ago.

Here in Kentucky, the average has dropped another 3 cents on the week to land at $3.03. That’s 10 cents less than a month ago, but still about $1.02 higher than last year at this time. Kentucky gas price average is now the 7th lowest in the nation.

“As usual, the price of oil is the most significant factor in the price consumers are paying for gas so, as oil comes down, so do pump prices,” says Lori Weaver Hawkins, spokesperson for AAA Blue Grass. “Unfortunately, this downward trend comes as a result of fears around the new COVID variant.”

The price of oil has fallen into the mid $60s per barrel - down from the mid-80s in October. Also helping to ease upward pricing pressure was the decision by OPEC and its oil-producing allies not to cut production.

On December 2, OPEC and its allies, a group referred to as OPEC+, announced it would stick to its plan, for now, to raise production by 400,000 b/d in January. The move was likely in response to the Biden Administration's call to increase supply to tame high fuel prices.

According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks increased by more than 4 million bbl to 215,422 million bbl last week. Meanwhile, gasoline demand dipped from 9.3 million b/d to 8.8 million b/d. The slight decrease in demand contributed to falling prices, while lower crude prices also put downward market pressure on pump prices.

Central and Eastern Kentucky gas prices continue downward
Gas prices across Central and Eastern Kentucky continued to see prices fall in most areas.

Lexington also dropped 3 cents on the week to land at $3.01. That’s 6 cents less than a month ago, but still 96 cents higher than a year ago.

As gas prices continue to trend back downward, there are a growing number of counties averaging below the $3 mark in Central and Eastern Kentucky. However, Bourbon and Lincoln Counties are the low spots, now at $2.90, followed by Lincoln at $2.90; Pulaski at $2.91; Montgomery and Mason Counties, both at $2.92; and Boyle at $2.93.

For those traveling around the region, Kentucky’s $3.03 per gallon average remains one of the lowest in the area, bested only by Missouri. Gas on average in Kentucky is 3 cents cheaper than in Tennessee, 11 cents less than Ohio and 16 cents lower than Indiana.

Prices at the pump in Kentucky are averaging 28 cents less than West Virginia, 20 cents less than Virginia and 48 cents less than Illinois, but 5 cents higher than Missouri.

Motorists can look for the cheapest gas in their area 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 or search your device’s app store.

Quick Stats
The nation's top 10 largest monthly decreases: Indiana (−21 cents), Michigan (−18 cents), Ohio (−17 cents), Washington, D.C. (−15 cents), Missouri (−14 cents), Texas (−13 cents), Iowa (−13 cents), Kansas (−12 cents), Oklahoma (−12 cents), and South Carolina (−12 cents).

The nation's top 10 most expensive markets: California ($4.68), Hawaii ($4.34), Nevada ($3.91), Washington ($3.87), Oregon ($3.78), Arizona ($3.77), Alaska ($3.71), Idaho ($3.65), Utah ($3.62) and Pennsylvania ($3.57).

Oil Market Dynamics
At the close of last week’s formal trading session, WTI decreased 24 cents to settle at $66.26. Crude oil prices decreased last week due to uncertainty of the COVID-19 omicron variant's impact on demand and the announcement that OPEC+ will ramp up production by 400,000 b/d in January. Additionally, EIA reported minimal draws on U.S. commercial crude oil inventories, which decreased by 900,000 bbl from the previous week to 433.1 million barrels. This week, crude oil prices could continue to fluctuate. Market watchers will keep a close eye on crude oil inventories and the impact that the omicron variant has on demand.

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 is the most comprehensive resource for gas prices.  Unlike the Lundberg Survey of approximately 7,000 gas stations and Gas Buddy reports which rely on customer input, AAA gas price reports reflect actual prices from credit card transactions at more than 100,000 gas stations in the U.S.

About AAA:

AAA provides automotive, travel, and insurance services to more than 63,000,000 members nationwide and more than 650,000 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, membership corporation working on behalf of motorists, who can map a route, access a COVID travel restriction map, find local gas prices and electric vehicle charging stations, 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 on joining or renewing a Membership, visit www.AAA.com.