After 14 weeks of declines, gas prices are on the rise, soaring on the West Coast and in the Midwest with more moderate increases in other parts of the country. Several refineries in California are undergoing planned or unplanned maintenance, creating extremely tight supplies on the West Coast. For the week, the national average for regular adds seven cents to $3.75 a gallon. The Oregon average rockets up 50 cents to $5.14. This is the largest weekly jump in the nation.
“Multiple refineries in the Los Angeles area and a refinery in Washington State are experiencing either planned or unplanned refinery work which could last several more days. This has put a significant crimp in supplies and sent pump prices soaring in this region. In addition, the Olympic pipeline in Washington is due for maintenance, perhaps as early as this week,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
Hurricane Ian also has the potential to cause problems, depending on the storm’s track, by disrupting oil production, refining and transportation in the Gulf of Mexico.
Until this week, the national and Oregon averages had been declining for 14 consecutive weeks, backing away from record highs set in mid-June. The national average reached its record high of $5.016 on June 14 while the Oregon average reached its record high of $5.548 on June 15.
“Lackluster demand for gas and lower crude oil prices should take some pressure off of rising pump prices. But drivers can expect a very volatile couple of weeks due to the refinery issues as well as Hurricane Ian slamming the Gulf Coast,” adds Dodds.
Crude oil prices have tumbled from recent highs due to fears of economic slowdowns elsewhere around the globe. Crude reached a recent high of $122.11 per barrel on June 8, and ranged from about $94 to $110 per barrel in July. In August, crude prices ranged between about $86 and $97. In September, crude prices have been between about $76 and $89 per barrel. Last week, West Texas Intermediate fell below $80 per barrel for the first time since January.
Crude prices rose dramatically leading up to and in the first few months of Russia’s invasion of Ukraine. Russia is one of the world’s top oil producers and its involvement in a war causes market volatility, and sanctions imposed on Russia by the U.S. and other western nations resulted in tighter global oil supplies. Oil supplies were already tight around the world as demand for oil increased as pandemic restrictions eased. A year ago, crude was around $75 per barrel compared to $77 today.
Crude oil is the main ingredient in gasoline and diesel, so pump prices are impacted by crude prices on the global markets. On average, about 53% of what we pay for in a gallon of gasoline is for the price of crude oil, 12% is refining, 21% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline in the U.S. decreased from 8.49 million b/d to 8.32 million b/d last week. This is lower than last year at this time when demand was at 8.9 million b/d. Total domestic gasoline stocks increased by 1.6 million bbl to 214.6 million bbl. Although gasoline demand has decreased, tight supply and fluctuating oil prices have increased the national average price. However, if gas demand remains low, pump price increases should be temporary.
Quick stats
Oregon is one of 28 states with higher prices now than a week ago, and 11 states, including Oregon, have double-digit increases. Oregon (+50 cents) has the largest weekly jump in the nation. Delaware (+4/10ths of a cent) has the smallest weekly increase. Rhode Island (-12 cents) has the largest weekly decline.
California ($5.88) has the most expensive gas in the country for the third week in a row. This week Oregon, Nevada ($5.12) and Washington ($5.02) join California and Hawaii ($5.27) as the only states with an average at or above $5 a gallon. This week 11 states have averages at or above $4, and 39 states and the District of Columbia have averages in the $3-range.
The cheapest gas in the nation is in Mississippi ($3.07) and Texas ($3.11). For the 90th week in a row, no state has an average below $2 a gallon.
Oregon is one of 11 states with higher prices now than a month ago. The national average is 11 cents less and the Oregon average is 36 cents more than a month ago. Oregon has the second-largest monthly increase in the nation. California (+60 cents) has the largest month-over-month jump. Connecticut (-58 cents) has the largest monthly drop.
All 50 states and the District of Columbia have higher prices now than a year ago. The national average is 56 cents more and the Oregon average is $1.41 more than a year ago. This is the second-largest yearly increase in the nation. California (+$1.49) has the biggest yearly increase. Connecticut (+13 cents) has the smallest year-over-year increase.
West Coast
The West Coast region continues to have the most expensive pump prices in the nation with all seven states in the top 10. This is typical for the West Coast as this region tends to consistently have fairly tight supplies, consuming about as much gasoline as is produced. In addition, this region is located relatively far from parts of the country where oil drilling, production and refining occurs, so transportation costs are higher. And environmental programs in this region add to the cost of production, storage and distribution.
Source: AAA