This is the time of year we often see a lull in demand for gasoline demand between spring break and Memorial Day, but oil markets remain volatile due to the conflicts in the Middle East and Ukraine. These are the major factors making gas prices waffle with small increases, some flat days and some price dips. For the week, the national average for regular edges down one cent to $3.66. The Oregon average adds seven cents to $4.50 a gallon.
“The switchover to the more expensive summer-blend fuel is wrapping up and we’re seeing smaller changes in gas prices this week. However, the big wildcard continues to be the price of crude oil, which accounts for more than half of what we pay for in a gallon of gas. Conflicts in the Middle East as well as the war between Russia and Ukraine continue to keep oil markets volatile,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “For now, the significant jumps in pump prices appear to be in the rearview mirror, barring unforeseen events.”
The national and Oregon averages remain at their highest prices since October. This week no Oregon counties have averages below $4 a gallon.
The Oregon average began 2024 at $3.79 a gallon compared to $4.50 today. Its lowest price so far this year is $3.58 on February 14. The national average started the year at $3.11 and is at $3.66 today. Its lowest price so far this year is just under $3.07 on January 15.
Gas prices always rise starting in late winter through the spring as refineries undergo maintenance as the switch to summer-blend fuel occurs. The switch occurs first in California, which is why pump prices on the West Coast often rise before other parts of the country. The East Coast is the last major market to make the change to summer-blend fuel. Most areas have a May 1 compliance date for refiners and terminals, while most gas stations have a June 1 deadline to switch to selling summer-blend until June 1. Switch-over dates are earlier in California with some areas in the state requiring summer-blend fuel by April 1. Some refineries will begin maintenance and the switchover as early as February.
Crude oil prices have remained elevated due to geopolitical events around the world including increased volatility in the Middle East, drone attacks on Russian refineries, and Houthi militant attacks in the Red Sea. In addition, production cuts by OPEC+ have tightened global crude oil supplies.
Crude oil prices have backed away from six-month highs. West Texas Intermediate climbed above $80 on March 14 and above $85 on April 2, then dipped below $85 starting on April 17. Major drivers of elevated crude prices are the unrest in the Middle East and the Ukrainian attacks on Russian refineries. Russia is a top global oil producer and the refinery attacks have reduced output.
Crude prices have been volatile after the attack on Israel by Hamas in October. While Israel and the Palestinian territory are not oil producers, concerns remain that the conflict could spread in the Middle East, which could potentially impact crude production in other oil-producing nations in the region.
Crude oil is trading around $82 today compared to $83 a week ago and $76 a year ago. In 2023, West Texas Intermediate ranged between $63 and $95 per barrel. Crude reached recent highs of $123.70 on March 8, 2022, shortly after the Russian invasion of Ukraine, and $122.11 per barrel on June 8, 2022. The all-time high for WTI crude oil is $147.27 in July 2008.
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 56% of what we pay for in a gallon of gasoline is for the price of crude oil, 19% is refining, 10% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline in the U.S. is at its lowest level for April (except April 2020 during the COVID pandemic) since 2014. Demand for gas in the U.S. fell from 8.66 to 8.42 million b/d for the week ending April 19, according to the U.S. Energy Information Administration (EIA). This compares to 9.51 million b/d at the same time last year.
Meanwhile, total domestic gasoline stocks decreased by .6 million bbl to 226.7 million bbl.
Lower demand and a drop in oil prices could push pump prices lower.
Quick stats
Oregon is one of 21 states with higher prices now than a week ago. Michigan (+12 cents) has the largest week-over-week gain in the nation. Ohio (-14 cents) has the biggest weekly decline. The average in Alaska is flat.
California ($5.39) has the most expensive gas in the nation for the ninth week in a row and is the only state in the nation with an average at or above $5 per gallon. Hawaii ($4.81) is second, Washington ($4.69) is third, Nevada ($4.58) is fourth, Oregon ($4.50) is fifth, Alaska ($4.38) is sixth, and Arizona ($4.03) is seventh. These are the seven states with averages at or above $4, same as a week ago. This week 43 states and the District of Columbia have averages in the $3-range. No states have averages in the $2 range this week.
The cheapest gas in the nation is in Mississippi ($3.10) and Colorado ($3.11) and. No state has had an average below $2 a gallon since January 7, 2021, when Mississippi and Texas were below that threshold.
The difference between the most expensive and least expensive states is $2.29 this week, compared to $2.33 a week ago.
Oregon is one of 43 states and the District of Columbia with higher prices now than a month ago. The national average is 12 cents more and the Oregon average is 23 cents more than a month ago. Oregon has the 14th-largest monthly gain in the nation. Delaware (+41 cents) has the largest monthly jump. Minnesota (-5 cents) has the biggest monthly decline.
Oregon is one of 31 states and the District of Columbia with higher prices now than a year ago. The national average is five cents more than a year ago and the Oregon average is 39 cents more than a year ago. This is the third-largest yearly gain in the nation. California (+52 cents) has the largest year-over-year increase. Arizona (-68 cents) has the largest yearly decrease.
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. It’s typical for the West Coast to have six or seven states in the top 10 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.
Diesel
For the week, the national average slips two cents to $4.01 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average ticks down one cent to $4.28. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $4.13 and the Oregon average was $4.55.
Source: AAA