June 2017 – Kansas motorists continue to enjoy falling gas prices since the Memorial Day holiday, with average pump prices across the state this week declining 4 cents to $2.15 per gallon. Kansas’ average gas price registers 10^th lowest in the nation for the second week in a row.

This week’s Kansas cities with the state’s gas price extremes are:

HIGH: St. Francis – $2.60

LOW: Chanute and Oxford – $1.98

At $2.34, the national gas price is cheaper today than it was on this day one year ago. The same trend rings true at the pump in 27 states in the Southeast and Midwest – many seeing double-digit price drops. More so, in 46 states, consumers are paying, on average, three cents less at the pump than a week ago.

The national price drop is due to an unexpected buildup of crude oil last week combined with ongoing high gasoline production runs, an increase in gasoline stocks and a drop in gasoline demand. If refiners continue to produce record amounts of gasoline and oversupply the market, consumers will reap the benefit and see slight fluctuations in gasoline prices (+/- a few cents) in coming weeks. However, it is not likely that gas prices will drop much lower than this week’s prices.

Following four straight weeks of draws, gasoline inventory is on the rise in the Great Lakes and Central States. According to the EIA, inventory in the region had its biggest one-week increase since the end of January. Sitting at nearly 55 million bbl, inventory is almost 2 million bbl higher than this time last year.

The high inventory is leading to dropping gas prices both on the week and compared to one year ago today. This week, all states are seeing on average a four-cent decrease. As inventory grows and demand remains inconsistent, the cheaper gas prices are likely to hold throughout summer in the region.

The oil market appears to be off to a good start this week, with the price per barrel above $46. The increase comes after last week’s report from the EIA showed surprising numbers in gasoline demand and crude inventories. After setting a record for use during the run-up to Memorial Day weekend, demand tumbled down by approximately 505,000 barrels per day. Market watchers expected to see a post-Memorial Day slump; however, the market was surprised by a strong build in crude inventories – a large increase of 3.3 million barrels. This figure re-emphasized that the market continues to see a substantial glut in crude inventories, resulting in high production rates putting downward pressure on prices per barrel.

At the end of last week, Baker Hughes, Inc. released its latest rig count report, revealing eight oil rigs had been added for the week. The U.S. now has 741 active oil rigs, an impressive number considering global concerns about the oversupply of crude in the market causing prices to trend downward. As expected, the continued growth puts more oil in the pipeline for gasoline production. With refineries still processing a lot of gasoline – measured in EIA’s recent report at over 17.5 million barrels per day – and a drop in demand, gasoline stocks around the country are continuing to grow. Price drops at the pump reflect this trend, and as the summer driving season zooms ahead, U.S. drivers may see drops continue into July and August.