AAA: Gas prices at lowest average since 2004

Summer ended with gas prices more than $1 cheaper compared to 2014 and now drivers can find gas for less than $2 in many states.

Those were the recent reports as AAA released its monthly gas price report this past week. Drivers can find at least one station selling gas for less than $2 per gallon in 41 states, while eight states have average prices below $2 per gallon.

Last week, the national average price of gas was $2.20 per gallon, which was the lowest average for the day since 2004. And AAA estimates drivers are spending about $275 million less per day on gasoline compared to a year ago. The warm weather in the Midwest is also helping consumers with fuel cost savings.

"The (gas) fuel savings continue to add up with pump prices in many areas below $2 per gallon," said Avery Ash, AAA spokesperson in a news release. "It looks increasingly likely that drivers will find the cheapest gas prices for the upcoming holidays in at least seven years."

Here are some of the highlights:

• About 3 in 10 U.S. stations are selling gas for less than $2 per gallon today, while the cheapest 1 percent of stations are selling gas for an average of $1.75 per gallon. In contrast, 1 percent of U.S. stations are selling gas for more than $3 per gallon.

The average price of gas on Nov. 5 was about 77 cents per gallon less than a year ago and nine cents less than a month ago.

• Average U.S. gas prices have declined about 60 cents per gallon since hitting a 2015 peak price of $2.80 per gallon on June 15.

• The states with the lowest average gas prices include South Carolina ($1.90), Alabama ($1.92), Mississippi ($1.93), Texas ($1.95) and Louisiana ($1.95).

• The states with the highest average prices include: Hawaii ($2.88), California ($2.83), Nevada ($2.71), Washington ($2.45) and Alaska ($2.44).

• In Minnesota, the average was $2.27.

Holiday outlook

Gas prices may temporarily rise on higher oil costs and refinery maintenance, AAA reports.

Many regions are likely to experience higher gas prices in the near term due to continued refinery maintenance and the recent rise in crude oil costs. Nevertheless, this increase may be temporary due to normal seasonal trends.

"Gas prices likely will increase during the first half of November, but that trend might not last long," Ash said. "With any luck, we could still see average gas prices drop below $2 per gallon in more areas in time for Christmas."

The cost of domestic crude oil has increased in recent days, which can make it more expensive for refineries to produce gasoline. Many refineries also have been conducting seasonal maintenance, which has temporarily limited fuel production and led to a decline in gasoline supplies. Much of this maintenance is expected to end over the next few weeks.

People generally drive fewer miles and use less gasoline as the weather grows colder, and AAA would expect this trend to continue, which could lead to lower gas prices later this year after refineries complete maintenance.

The national average price of gas has fallen in November for four years in a row. Last year, the national average dropped 23 cents per gallon during the month.

There remains significant uncertainty surrounding the oil market, which makes it difficult to predict future gas prices. If oil production declines or the global economy grows faster than expected, then oil prices could rise further. If oil production remains strong and the global economy continues to grow at a slower than expected rate, then oil prices may drop further.

Drivers in October paid the cheapest average gas prices in eight months

The national average price of gas in October was $2.26 per gallon, which was the cheapest monthly average since February 2015 and the lowest October average since 2006. By comparison, the average price of gas in October 2014 was $3.16 per gallon.

• The national average declined 23 out of 31 days in October for a total of 10 cents per gallon.

• The national average price of gas has remained lower than $3 per gallon for more than a year going back to Nov. 1, 2014.

• Gas prices remain relatively inexpensive compared to recent years due to the low cost of crude oil. The WTI oil prices closed yesterday at $47.90 per barrel. By comparison, the cost of oil a year ago was $77.19 per barrel.

• Oil prices are much lower than a year ago due to an abundance of supplies and weakening global demand. Oil production remains strong in regions such the Middle East and in the United States, while worldwide demand has weakened due to slower than projected growth in the global economy, particularly in China.

• Commercial stocks of domestic crude oil are 27 percent higher than a year ago, according to the EIA, while supplies of gasoline are nearly seven percent higher than a year ago.

• Many refineries conduct maintenance in the autumn to maintain equipment following the busy summer driving season. This maintenance helps refineries run smoothly during the year, but it can lead to a temporary decline in fuel production. The Energy Information Administration estimated that Midwestern refineries conducted a record level of maintenance in October, which is the main reason why prices in that region were more volatile than in neighboring areas.

• Drivers can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android.

For more information, go to AAA www.FuelGaugeReport.AAA.com for updates on fuel price averages daily. Every day up to 120,000 stations are surveyed based on credit card swipes and direct feeds in cooperation with the Oil Price Information Service and Wright Express for unmatched statistical reliability. All average retail prices in this report are for a gallon of regular, unleaded gasoline.