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Local Pump Savings Vanish Along with Rising Crude Oil Prices

hand at gas pump

VIRGINA BEACH, VA. (February 1, 2021) – The national gas price average has been cheaper year-over-year for 336 days—as much as $1.12/gallon less. However, AAA predicts that trend will end as early as this week. At $2.42, the national average is only a nickel cheaper than a year ago.

 

“For nearly a year, motorists have been saving 53 cents a gallon, on average, when filling up their gas tanks. That extra pocket change is quickly going to dwindle thanks to rising crude oil prices that have made for more expensive pump prices,” said Holly Dalby, AAA spokesperson.

 

While cheaper year-over-year, the national average increased by two cents on the week and is now 17 cents more expensive than last month. The national average continued to climb this past week despite a drop in gasoline demand and refinery utilization. According to the latest Energy Information Administration (EIA) measurements, demand declined from 8.11 million b/d to 7.83 million b/d and total refinery utilization decreased from 82.5 percent to 81.7 percent over last week. These decreases led to an increase in gasoline supply of 2.4 million bbl.

 

Typically, these factors (decrease in demand, increase in supply) drive a decrease at the pump, but sustained crude oil prices are pushing the increase. For three weeks, crude continues to price between $52–$53/bbl, steady price points not seen since mid-February 2020. Gas prices are expected to continue to increase as crude oil prices remain at these price points.

 

Local Stats

The average pump price in Virginia inched up a penny to $2.31, and now sits four cents higher than last year. Locally in Hampton Roads drivers saw a two cent increase as well, to $2.27 average, which is three cents higher than a year ago.

 

Feb. 1, 2021

Week Ago

Month Ago

Year Ago

National

$2.42

$2.40

$2.25

$2.47

Virginia

$2.31

$2.30

$2.10

$2.27

Hampton Roads

$2.27

$2.25

$2.11

$2.24

 

 

 

Oil Market Dynamics

At the close of Friday’s formal trading session, WTI decreased by 14 cents to settle at $52.20. Price gains were limited last week by ongoing market concern that crude demand may take more time than expected to recover in 2021 due to new coronavirus infections and associated travel restrictions. However, EIA’s new weekly report prompted crude price increases earlier in the week after it showed total domestic crude inventories declined by 9.9 million bbl to 476.7 million bbl, which is the largest weekly decline since late July 2020. For this week, crude prices may continue to drop if market concern regarding demand continues to grow.

CST 1016202-80 Copyright © Tidewater Automobile Association of Virginia, Incorporated. All Rights Reserved.
AAA Tidewater Virginia is a member club affiliated with the American Automobile Association (AAA) national federation and serves members in the Tidewater Virginia region (All Hampton Roads cities, including Norfolk, Chesapeake, Suffolk, Portsmouth, Virginia Beach, Hampton, Newport News, Williamsburg; Virginia's Eastern Shore; as well as the following counties: Greensville, Surry, Brunswick, Isle of Wight, Gloucester, Lancaster, Middlesex, Richmond County, Southampton, Sussex, Mecklenburg, James City County, York, Lunenburg, Essex, King & Queen, Mathews, Northumberland, and Westmoreland).