Lackluster demand for gas, the switch to winter-blend fuel and lower crude oil costs are driving pump prices lower in most states, including Oregon. But refinery issues in California are impacting West Coast states. Pump prices are rising in California and Nevada, while the pace of declines has slowed in Oregon and Washington. For the week, the national average for regular falls six cents to $3.20 a gallon. The Oregon average dips a penny to $3.75 a gallon.
“The average for regular gas in California is up five cents in the last week. Several refineries in California have had issues and/or have undergone refinery maintenance in the past few weeks, resulting in reduced output. Prices are well above $5 a gallon in several California counties. This is the third year in a row that late summer refinery issues in California have caused gas prices to rise,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Meanwhile, gas prices are falling in most other states, in part due to the switch to winter-blend fuel and lower crude oil prices.”
This week, all Oregon counties have averages below $4 a gallon, except for Curry ($4.03) and Wallowa ($4.24).
The Oregon average began 2024 at $3.79 a gallon compared to $3.75 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 $3.20 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. However, with spiking pump prices in California, it’s possible the state may allow winter-blend fuel earlier there.
U.S. crude oil prices (West Texas Intermediate) have been below $80 per barrel since mid-August, and even dipped below $70 for several days earlier this month to the lowest prices since June 2023 on global concerns of declining demand.
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 $71 today compared to $66 a week ago and $91 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 8.93 million b/d to 8.47 million b/d for the week ending August 30, according to the U.S. Energy Information Administration (EIA). This compares to 8.31 million b/d a year ago. Meanwhile, total domestic gasoline stocks rose 219.2 to 221.6 million barrels, and gasoline production decreased last week, averaging 9.4 million barrels per day.
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 last reached in August. The U.S. produces more crude oil than any other country, according to the EIA.
Tumbling gasoline demand and oil costs will likely keep pump prices sliding in most states except California. And declines in Oregon and other West Coast states will likely be muted until refinery issues are resolved.
Quick stats
Oregon is one of 47 states and the District of Columbia with lower prices now than a week ago. Indiana (-16 cents) has the largest week-over-week drop in the nation. California (+6 cents) has the largest weekly increase.
California ($4.78) has the most expensive gas in the nation for the second week in a row. Hawaii ($4.63) is second, Washington ($4.15) is third, and Nevada ($4.01) is fourth. These are the four states with averages at or above $4 a gallon, up from three states a week ago. This week 29 states and the District of Columbia have averages in the $3-range. There are 17 states with an average in the $2 range this week.
The cheapest gas in the nation is in Mississippi ($2.73) and Tennessee ($2.74). 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 $2.05 this week, compared to $1.96 a week ago.
Oregon is one of 47 states and the District of Columbia with lower prices now than a month ago. The national average is 22 cents less and the Oregon average is 11 cents less than a month ago. Ohio (-51 cents) has the largest month-over-month drop in the nation. California (+18 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 67 cents less and the Oregon average is 95 cents less than a year ago. This is the third-largest year-over-year drop in the nation. Arizona (-$1.15) has the largest year-over-year drop.
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.
As mentioned above, California ($4.78) has the most expensive gas in the country. Hawaii, Washington, Nevada, Oregon, and Alaska round out the top six. Arizona is 12th. Oregon is fifth for the fifth week in a row.
Arizona (-4 cents), Alaska (-2 cents), Hawaii (-2 cents), Washington (-1 cent), and Oregon (-1 cent) have week-over-week declines in the West Coast region. California (+5 cents) and Nevada (+3 cents) have week-over-week increases.
The refinery utilization rate on the West Coast fell from 91.0% to 88.6% for the week ending September 6. This rate has ranged between about 74% to 93% in the last year. The latest national refinery utilization rate dipped from 93.3% to 92.8%. The refinery utilization rate measures how much crude oil refineries are processing as a percentage of their maximum capacity. A low or declining rate can put upward pressure on pump prices, while a high or rising rate can put downward pressure on pump prices.
According to EIA’s latest weekly report, total gas stocks in the region dropped from 30.33 million bbl. to 28.86 million bbl.
A decrease in the refinery utilization rate and/or a low rate can put upward pressure on pump prices, and a decrease in gasoline stocks can put upward pressure on pump prices.
Oil market dynamics
Crude oil prices have ticked up above $71 this week as market watchers expect the Federal Reserve to cut interest rates this week. In addition, production hasn’t fully returned in the Gulf of Mexico after Hurricane Francine. Meanwhile, the EIA reports that crude oil inventories increased by 0.8 million barrels from the previous week. At 419.1 million barrels, U.S. crude oil inventories are about 4% below the five-year average for this time of year.
At the close of Friday’s formal trading session, WTI slipped 32 cents to settle at $68.65. At the close of Monday’s formal trading session, WTI added $1.44 to settle at $70.09. Today crude is trading around $72 compared to $66 a week ago. Crude prices are about $19 less than a year ago.
Drivers can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.
Diesel
For the week, the national average falls five cents to $3.60 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average loses three cents to $3.92. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $4.57 and the Oregon average was $5.24.
Source: AAA