Plunging crude oil prices and low U.S. demand for gas are the major drivers of declining pump prices. The national and Oregon averages for regular gas are at their lowest prices since February. Crude oil prices have fallen below $70 per barrel to their lowest prices in over a year, even as the storm Francine targets the Gulf of Mexico. For the week, the national average for regular loses six cents to $3.26 a gallon. The Oregon average slips two cents to $3.76 a gallon. Year-over year, Oregon has the largest drop in the nation, down 96 cents compared to this date in 2023.
“Gas prices typically fall after Labor Day. Demand decreases as the summer driving season comes to an end and the switch to winter-blend fuel occurs. Winter-blend fuel is cheaper to produce than summer-blend fuel, which is more environmentally friendly during the hot summer months,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Gas prices should continue to fall in the coming weeks, barring unforeseen events such as a refinery or pipeline outage, a storm that impacts the Gulf of Mexico, rising tensions in the Middle East, or other geo-political events.”
This week, the storm Francine is churning in the Gulf of Mexico and is expected to turn from a tropical storm into a Category 2 hurricane as it moves toward the northern Gulf Coast and Louisiana. Even though U.S. oil and gas producing facilities are threatened, crude oil prices are not spiking due to market concerns of a global oil oversupply and weaker demand outlook.
This week, 33 Oregon counties have averages below $4 per gallon:
- Baker $3.68
- Benton $3.33
- Clackamas $3.83
- Columbia $3.97
- Clatsop $3.99
- Coos $3.86
- Crook $3.84
- Deschutes $3.64
- Douglas $3.64
- Gilliam $3.70
- Grant $3.84
- Harney $3.76
- Hood River $3.61
- Jackson $3.81
- Jefferson $3.56
- Josephine $3.85
- Klamath $3.60
- Lake $3.78
- Lane $3.59
- Lincoln $3.50
- Linn $3.44
- Malheur $3.75
- Marion $3.67
- Morrow $3.62
- Multnomah $3.92
- Polk $3.61
- Sherman $3.41
- Tillamook $3.83
- Umatilla $3.
- Union $3.64
- Yamhill $3.81
- Wasco $3.66
- Washington $3.99
Curry ($4.04) and Wallowa ($4.24) are the only Oregon counties with averages still above $4 per gallon.
The Oregon average began 2024 at $3.79 a gallon compared to $3.76 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 $3.26 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 typically drop in the fall, due to the switch from summer-blend to winter-blend fuel, which costs less to produce. The switch starts in September. Many areas, including Oregon, can sell winter-blend fuel starting September 15. However, Northern and Southern California require summer-blend fuel through October 31.
U.S. crude oil prices rose fell below $70 per barrel last week to the lowest prices since June 2023 on global concerns of declining demand. West Texas Intermediate was above $80 per barrel in mid-August.
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 $76 today compared to $70 a week ago and $87 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, 13% is refining, 16% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline in the U.S. fell from 9.30 million b/d to 8.93 million b/d for the week ending August 30, according to the U.S. Energy Information Administration (EIA). This compares to 9.32 million b/d a year ago. Meanwhile, total domestic gasoline stocks rose slightly from 218.4 to 219.2 million barrels, and gasoline production increased last week, averaging 9.7 million daily.
Crude oil production in the U.S. is at 13.3 million barrels per day, according to the EIA. This remains near the record high of 13.4 million barrels per day set in August. The U.S. produces more crude oil than any other country, according to the EIA.
Falling gasoline demand and oil costs will likely keep pump prices sliding.
Quick stats
Oregon is one of 41 states and the District of Columbia with lower prices now than a week ago. Ohio (-18 cents) has the largest week-over-week drop in the nation. California (+8 cents) has the largest weekly increase.
After seven weeks, California bumps Hawaii ($4.66) as the state with the most expensive gas in the nation. Washington ($4.16) is third. These are the three states with averages at or above $4 a gallon, same as a week ago. This week 36 states and the District of Columbia have averages in the $3-range. There are 11 states with an average in the $2 range this week.
The cheapest gas in the nation is in Mississippi ($2.78) and Tennessee ($2.81). 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 $1.96 this week, compared to $1.80 a week ago.
Oregon is one of 46 states and the District of Columbia with lower prices now than a month ago. The national average is 19 cents less and the Oregon average is 12 cents less than a month ago. Ohio (-46 cents) has the largest month-over-month drop in the nation. California (+13 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 57 cents less and the Oregon average is 96 cents less than a year ago. This is the largest year-over-year drop in the nation.
West Coast
The West Coast region continues to have the most expensive pump prices in the nation with six of the 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 falls four cents to $3.65 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average holds steady at $3.95. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $4.47 and the Oregon average was $5.20.
Source: AAA