Pump prices are ticking down in most states, driven by crude oil prices that fell to their lowest level in more a year and a half. For the week, the national average for regular unleaded dips three cents to $3.44 a gallon. The Oregon average slips three cents to $3.88.
“Crude oil prices plunged to $66 per barrel last week, the lowest price since August 2021. Markets continue to react to concerns about the global banking sector, and fears of another financial collapse similar to what drove the 2008 recession,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
Crude oil is trading around $69 today compared to $71 a week ago and $112 a year ago. In February, West Texas Intermediate ranged between about $73 and $80 per barrel. In January, WTI ranged between about $73 and $82 bbl. 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 prices tend to decrease in response to negative economic news, such as fears about the banking industry, because countries with faltering economies tend to consume less oil. Crude prices tend to increase in response to positive economic news, as growing, thriving economies tend to consume more oil. Crude prices also climb when geo-political events have the potential to disrupt supply. Crude prices rose dramatically leading up to and in the first few months of Russia’s invasion of Ukraine, and gas prices also skyrocketed. 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.
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, 20% is refining, 11% distribution and marketing, and 14% are taxes, according to the U.S. Energy Information Administration.
A factor putting upward pressure on pump prices this time of year is the seasonal switch to summer-blend fuel. California has an April 1 deadline to switch to summer-blend fuel, while the federally mandated deadline is May 1. The West Coast region often sees prices climb earlier than other parts of the country because of that earlier California deadline,” says Dodds. “Refinery maintenance in Washington and Northern California could soon tighten supply.”
More info on summer- and winter-blend gasoline can be found at the EPA website.
Demand for gasoline in the U.S. demand increased slightly from 8.56 to 8.59 million b/d for the week ending March 10. This compares to 8.94 million b/d a year ago. Meanwhile, total domestic gasoline stocks decreased by 2.1 million bbl to 236 million bbl last week. Increasing demand amid tighter supply would typically push pump prices higher; however, lower oil prices have countered this effect. If crude oil prices keep falling, drivers could see pump prices decline.
Oregon is one of 44 states where the price is lower than a week ago. Colorado (-15 cents) and Delaware (-13 cents) have the largest declines. Arizona (+16 cents) and Florida (+13 cents) have the largest gains. The average in Kentucky is flat.
California ($4.84) has the most expensive gas in the nation for the third week in a row. Hawaii ($4.82) is second, Nevada ($4.26) is third, Washington ($4.24) is fourth, and Arizona ($4.11 is fifth. These are the only five states with averages at or above $4 a gallon. This week 43 states and the District of Columbia have averages in the $3-range. Mississippi ($2.98) and Oklahoma ($2.99) have averages in the $2-range this week, up from no states a week ago.
The cheapest gas in the nation is in Mississippi ($2.98) and Oklahoma ($2.99). For the 114th week in a row, no state has an average below $2 a gallon.
The difference between the most expensive and least expensive states is $1.86 this week compared to $1.89 last week.
Oregon is one of 22 states with higher prices now than a month ago. The national average is three cents more and the Oregon average is two cents more than a month ago. Arizona (+54 cents) and Michigan (+18 cents) have the largest monthly gains. Colorado (-36 cents) and Oklahoma (-10 cents) have the largest monthly declines.
All 50 states and the District of Columbia have lower prices now than a year ago. The national average is 82 cents less and the Oregon average is 83 cents less than a year ago. Connecticut (-$1.06) and California (-$1.02) have the largest yearly drops. A year ago, pump prices were rising rapidly after the start of the Russian invasion of Ukraine.
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.
For the week, the national average falls six cents to $4.28 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average loses a nickel to $4.66. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $5.05 and the Oregon average was $5.33.