Gas prices continue to creep down in Oregon and most other states as the summer driving season winds down. Soft demand for gas continues to be a factor. However, escalating tensions in the Middle East and hurricane season have the potential to send oil and gas prices higher. Meanwhile, U.S. oil production last week hit a new record of 13.4 million barrels per day. For the week, the national average for regular slips two cents to $3.44 a gallon. The Oregon average also ticks down two cents to $3.87 a gallon.
The national average is at its cheapest price since June. The Oregon average is at its lowest price since March.
“Crude oil prices added to last week’s gains before dipping today. Markets are concerned about rising tensions in the Middle East. The higher crude prices come even as OPEC lowered its demand forecast and after some negative economic news out of China,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
Israel has been expecting attacks by Iran and Hezbollah after leaders of Hamas and Hezbollah were killed. The U.S. has sent forces to the Middle East including a strike group and a submarine. Meanwhile, OPEC lowered its demand forecast on Monday by 135,000 barrels per day, in part due to concerns over China’s economy.
This week, 27 Oregon counties have averages below $4 per gallon, compared to 25 counties a week ago:
- Baker $3.74
- Benton $3.47
- Clackamas $3.90
- Crook $3.85
- Deschutes $3.74
- Douglas $3.77
- Gilliam $3.80
- Grant $3.97
- Hood River $3.75
- Jackson $3.87
- Jefferson $3.69
- Josephine $3.95
- Klamath $3.81
- Lake $3.94
- Lane $3.69
- Linn $3.60
- Lincoln $3.62
- Malheur $3.81
- Marion $3.79
- Morrow $3.73
- Polk $3.74
- Sherman $3.76
- Tillamook $3.89
- Umatilla $3.72
- Union $3.98
- Yamhill $3.87
- Wasco $3.83
The Oregon average began 2024 at $3.79 a gallon compared to $3.87 today. Its lowest price so far this year is $3.58 on February 14 and the highest is nearly $4.51 on May 1. The national average started the year at $3.11 and is at $3.44 today. Its lowest price so far this year is just under $3.07 on January 15 and the highest is just under $3.68 on April 19.
Gas prices are often fairly steady during the summer months, barring hurricanes, supply disruptions, economic forces, and/or geo-political events. 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 rose above $80 per barrel on Monday on concerns that escalating tensions in the Middle East could impact global supplies. West Texas Intermediate fell below $80 per barrel on July 21 and remained in the low to mid-$70s until late last week. Global markets had been concerned about weak economic data out of the U.S. and China, but then positive economic news out of the U.S. and developments in the Middle East helped push crude oil prices higher.
Crude prices are impacted by economic news as well as geopolitical events around the world including the war between Israel and Hamas, the war between Russia and Ukraine, and Houthi militant attacks in the Red Sea. In addition, production cuts by OPEC+ have tightened global crude oil supplies, which will continue to impact prices. And we’re in hurricane season, which runs from June 1 to November 30.
The price of crude oil reached the year-to-date high of nearly $87 per barrel on April 5. Major drivers of elevated crude prices have been the unrest in the Middle East, the decision by OPEC+ to keep oil production cuts in place, and 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 last 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 $79 today compared to $73 a week ago and $83 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 55% of what we pay for in a gallon of gasoline is for the price of crude oil, 12% is refining, 18% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline in the U.S. fell from 9.25 million b/d to 8.97 million b/d for the week ending August 2, according to the U.S. Energy Information Administration (EIA). This compares to 9.30 million b/d a year ago.
Meanwhile, total domestic gasoline stocks rose from 223.8 to 225.1 million barrels.
Gasoline production increased last week, averaging 10.0 million barrels per day. Crude oil production hit an all-time high of 13.4 million barrels per day. This is up from 12.6 million barrels per day a year ago. The U.S. produces more crude oil than any other country, according to the EIA.
Lower gasoline demand and rising supply should lead to lower pump prices; however, high crude oil prices could put upward pressure on pump prices.
Quick stats
Oregon is one of 31 states with lower prices now than a week ago. Indiana (-14 cents) has the largest week-over-week drop in the nation. New Mexico (+12 cents) has the largest weekly jump. The average in the District of Columbia is flat.
Hawaii ($4.66) has the most expensive gas in the nation for the fourth week in a row. California ($4.60) is second, and Washington ($4.23) is third. These are the three states with averages at or above $4 a gallon, same as a week ago. This week 46 states and the District of Columbia have averages in the $3-range. There is one state with an average in the $2 range this week.
The cheapest gas in the nation is in Mississippi ($2.96) and Oklahoma ($3.04). 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 $1.71 this week, compared to $1.72 a week ago.
Oregon is one of 40 states and the District of Columbia with lower prices now than a month ago. The national average is eight cents less and the Oregon average is 14 cents less than a month ago. This is the 11-largest month-over-month decline in the nation. South Carolina (-21 cents) has the largest month-over-month drop in the nation. Ohio (+17 cents) has the largest monthly increase in the nation.
All 50 states and the District of Columbia have lower prices now than a year ago. The national average is 40 cents less and the Oregon average is 81 cents less than a year ago. This is the largest year-over-year drop in the nation.
Diesel
For the week, the national average loses three cents to $3.76 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average also falls three cents to $3.99. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $4.31 and the Oregon average was $4.73.
Source: AAA