(The Center Square) – While gas prices have soared nationwide this year, average prices at the pump have remained among the lowest in Oklahoma and Texas, in part because they are significant oil and gas hubs for the nation.
The lowest current average regular gas prices per gallon are $2.822 in Oklahoma and $2.825 in Texas. Oklahomans have had the lowest prices nationwide throughout the surge of gas prices this fall, AAA reports. In the spring, Oklahoma’s average gas prices were the sixth-lowest in the nation.
On Dec. 21, AAA Texas Weekend Gas watch reported that Texas’ statewide gas price average was $2.89 for a gallon of regular unleaded fuel.
By Christmas, Texans visiting the Gulf in Galveston paid $2.44 a gallon, lower than other areas near Houston, where prices averaged $2.89 a gallon.
However, gas prices in Texas are still around a dollar more than they were last Christmas. And last spring, while both states were under lockdown, average gas prices were $1.52 a gallon in Oklahoma and in the Sherman/Denison area Texans were paying around $1.17 a gallon.
As of Dec. 28, 2021, the average price for regular unleaded fuel in Texas was $2.87 a gallon, AAA Texas reports, compared to the national average of $3.28.
In November, regular gasoline retail prices averaged $3.39 a gallon nationally, the U.S. Energy Information Agency reports. That’s 10 cents a gallon more than it was in October and $1.29 a gallon more than it was last November.
November’s monthly average was the highest since September 2014, the EIA adds.
The agency forecasts that retail gasoline prices will fall to $3.01 a gallon in January and $2.88 a gallon, on average, in 2022.
Total U.S. crude oil production was an estimated at 11.7 million barrels a dayin November, the agency notes. It’s forecasting an increase to an average of 11.8 million barrels a day in 2022 and an average of 12.1 million barrels a day in the fourth quarter of 2022.
Prices at the pump are greatly impacted by the West Texas Intermediate Index, the benchmark for North America, which serves as a reference point for buyers and sellers of crude oil. They’re also impacted by U.S. EIA, API and OPEC+ reports, and a range of public policies decisions.
The WTI’s crude oil is sourced from the Permian and Delaware Basins of Texas and New Mexico, and is refined in the Gulf of Mexico and the Midwest. The point of delivery for its physical exchange and price settlement has historically been Cushing, Oklahoma, known as the “Pipeline Crossroads of the World.” But through new pipeline access the same crude is trading for export as AGS at U.S. Gulf ports.
In 2020 and 2021, WTI production plummeted for lack of drilling and completing new wells. Adequate crude supplies provided lower prices at the pump when the WTI crude oil average per barrel was $56.99 in 2019 and even lower when its average was $39.17 a barrel in 2020 – after it hit a low of negative $40 a barrel on April 20, 2020.
Gas prices at the pump increased as the WTI reached an average $67.87 a barrel in 2021. The EIA projects the WTI average to be $66.42 a barrel in 2022; Wall Street analysts project it to be much higher.
Nationally, the average price for a regular gallon of gas was $2.60 in 2019, $2.18 in 2020, and $3.00 in 2021, the EIA reports, projecting the average to be $2.88 a gallon in 2022.
On-highway retail for diesel fuel per gallon was $3.09 in 2019, $2.56 in 2020, and $3.28 in 2021, the EIA reports, projecting the average to be $3.19 a gallon in 2022.
Following Texas and Oklahoma, 13 states have average gas prices under $3 a gallon, Gas Buddy reports. The majority of states’ average gas prices are over $3 a gallon. California and Hawaii have consistently had the highest average gas prices in the nation, in part to higher taxes, with average gas prices now over $4 a gallon.
Unlike the EIA’s projections, GasBuddy expects average gas prices to increase nationally next year to around $3.41 a gallon with a peak in May that could reach $4 a gallon. Gas Buddy analyst Patrick De Haan told CNN: “We could see a national average that flirts with, or in a worst-case scenario, potentially exceeds $4 a gallon.”
De Haan says with the WTI reaching $76 a barrel, “Expect a spike soon in the Great Lakes, which could push the national average up a few cents soon. West Coast could see some increases soon too.”
By Bethany Blankley | The Center Square contributor