AAA Reports Gas Price Average Holds Steady Across Hampton Roads and the Nation

VIRGINIA BEACH, VA. (January 4, 2021) – The new year has started, but the national gas price average remains unchanged, holding steady at $2.25 for the last 12 days. Pump price stability at the start of the year is credited to consistent crude oil prices in late December, about $47-48/bbl, combined with low demand. U.S. gasoline demand, as recorded by the Energy Information Administration (EIA), was at the lowest level for the last week of December in 23 years (since 1998) – at 8.1 million b/d.

“Holiday road travel was down at least 25%. With fewer people on the road, the majority of states saw little change at the pump from the last week of 2020 to the first few days of 2021,” said Holly Dalby, AAA spokesperson.

While the national gas price average is nine cents more than last month, January gas prices are already 33 cents cheaper than this time last year. That is the largest year-over-year difference at the beginning of January since 2015. AAA expects demand to dwindle in coming weeks and gas prices to likely be cheaper, especially if crude oil holds at the current price point.

How high or low gas prices will go in 2021 will largely depend on crude oil prices, supply and demand. AAA expects that as the vaccine becomes more widely available and states loosen travel restrictions, Americans will begin to drive more and at that point we will see an impact at the pump. At $2.17, 2020 saw the lowest annual national gas price average since 2016.

Local Stats

The average pump price in Virginia inched up a penny to $2.11 but remains 27 cents less than last year. Locally in Hampton Roads, the price continues to hold at $2.11. This is 21 cents less than a year ago.

Oil Market Dynamics

At the close of Thursday’s formal trading session, WTI increased by 12 cents to settle at $48.50. Crude prices increased last week due to a weak dollar and rising market optimism that coronavirus vaccines will help crude oil demand recover in 2021. However, as coronavirus infection rates continue to climb and travel restrictions increase, crude prices will likely be capped this week.