Crude oil prices may technically be in a new bull market, but like John Candy and Steve Martin in the movie Planes, Trains, and Automobiles, gasoline prices in the United States are going the wrong way. The chart below compares the change in the national average price of gasoline so far this year to the way prices tend to track in an ‘average’ year going back to 2005. According to AAA, the national average price of a gallon of gas has declined to $1.826 per gallon, which translates to a YTD decline of 8.5% already in 2016. In a typical year, prices at the pump are flat to modestly higher at this point.
The table to the right shows the YTD change in gas prices this year compared to this point in prior years since 2005. While prices are usually up on the year at this point, 2016 marks the third straight year that prices have started out on a downbeat note. In fact, last year’s 9.2% decline through 1/25 was the steepest drop in the first 25 days of the year since the time series begins in 2005. Not only have the starts of the last few years been bad for gas prices, but the entire year has been bad. The chart below shows the historical y/y change in the national average price of a gallon of gas going back to 2005. Prices are currently down 10.2% versus this point last year, and they have been down on a year-over-year basis for more than a year and a half. That’s an even longer stretch of y/y declines than we saw during the financial crisis! Compared to this point two years ago, prices are now down more than 44%.