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EIA: US average gasoline prices and vehicle travel fell to multiyear lows in 2020

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Hydrocarbon Engineering,

US regular retail gasoline prices averaged US$2.17 per gallon (gal) in 2020, 44 cents/gal (17%) lower than in 2019 and the lowest annual average since 2016, according to the US Energy Information Administration (EIA).

EIA: US average gasoline prices and vehicle travel fell to multiyear lows in 2020

Gasoline prices at the beginning of the year were more than US$2.50/gal; however, responses to the COVID-19 pandemic resulted in widespread reductions in passenger travel and gasoline demand, contributing to lower gasoline prices across the US.

US gasoline prices averaged US$2.38/gal in mid-March, just before a national emergency was declared. Gasoline prices fell for several consecutive weeks, ultimately reaching US$1.77/gal on 27 April, the lowest average price since early 2016, according to the EIA's Gasoline and Diesel Fuel Update. Vehicle travel in April fell to its lowest monthly level on record, according to a Bureau of Transportation Statistics data series that dates back to 2000.

Vehicle travel and gasoline demand (measured as product supplied) began to increase in May, relative to April levels. From May through the end of the summer, US gasoline inventories remained high because of sustained lower demand, even as refiners reduced gasoline production because of lower margins.

In most years, US gasoline prices tend to be highest in the summer, when gasoline demand is usually higher. However, in 2020, US gasoline prices were highest at the beginning of the year. Of the 10 cities surveyed in EIA’s Gasoline and Diesel Fuel Update, eight cities registered their highest gasoline prices for the year on 6 January, and the remaining two cities (Chicago and Houston) registered their annual highs the following week, on 13 January.

Gasoline prices in Boston, Chicago, Cleveland, and San Francisco reached their annual lows on 27 April, and gasoline prices in Denver, Los Angeles, New York, and Seattle reached their annual lows the following week, on 4 May. The lowest gasoline prices of the year in the remaining two cities (Houston and Miami) occurred two weeks later, on 18 May.

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