Experts Are Describing Inventory as Oversupplied
A larger-than-usual inventory and demand that is trailing expectations are contributing to falling gas prices in the Northeast, according to AAA.
The automotive group reported Monday that the $3.01 per gallon average gas price in Massachusetts this week was down 2 cents from last week and 17 cents per gallon lower than this time a year ago. AAA’s survey found gas averaging $3.09 per gallon nationwide.
At 67 million barrels, the Northeast gas supply is 500,000 barrels higher than at this time in 2024 and well above the five-year average of 64.8 million barrels, AAA said, citing Energy Information Administration data. Gas prices normally rise at this time of year, but AAA said rising demand for gas last week climbed to a lesser degree than analysts expected.
“With less than a month until the official switchover to summer blended gasoline, many market analysts are increasingly describing the inventory situation as oversupplied — especially since demand continues to languish and concerns about future economic headwinds are driving oil prices lower,” AAA said.
AAA spokesperson Mark Schieldrop said the U.S. produces 13 to 14 million barrels of oil per day, and imports 3.5 million to 4 million barrels of oil per day from Canada that is sent directly to refineries via pipeline. While tariffs can play a role in prices increases, he said Canada can’t easily ship and sell its oil elsewhere and market observers believe the dynamic “will compel Canadian producers to absorb some of the cost increases and sell product at a discount.”
“Prices at the pump across Massachusetts and the rest of the Northeast will increase in April due to the switchover to summer blend gasoline, which is more expensive to produce,” Schieldrop said. “Nevertheless, when prices adjust after the switch, it will be difficult to ascertain how much of the increase is due to tariffs, oil prices, demand vs. supply, and so on. Needless to say, a lot goes into the price for a gallon of gasoline beyond tariffs.”
