Drivers are getting an early holiday gift as gas prices fall to their cheapest prices since 2021. The national average is at its cheapest price since May 2021 and the Oregon average is down to its lowest price since June 2021. Both averages are also at their cheapest prices so far for 2024. For the week, the national average for regular loses three cents to $3.01 a gallon. The Oregon average falls five cents to $3.49 a gallon.
“The national average is almost down to $3 a gallon. It’s been less than a dime away from the $3 mark for about a month and has slowly been edging lower. The last time the national average was below $3 was May 11, 2021,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Drivers should continue to see gas prices inching lower as we approach the holidays, barring unforeseen events.”
The Oregon average began 2024 at $3.79 a gallon compared to $3.49 today. This is the lowest price so far in 2024 and the highest is nearly $4.51 on May 1. The national average started the year at $3.11 and is at $3.01 today. This is the lowest price so far this year, and the highest is just under $3.68 on April 19.
This week, all Oregon counties have averages below $4 a gallon.
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. Prices usually decline to their lowest levels of the year in late fall and early winter before increasing again in the late winter and early spring.
Meanwhile, crude oil production in the U.S. is once again at a record high. The U.S. Energy Information Administration (EIA) reports that crude production in this country rose from 13.49 to 13.51 million barrels per day for the week ending Nov.29. Production has been at 13.5 million barrels per day several times since October. The U.S. has been the top producer of crude oil in the world since 2018 and has been increasing its oil production since about 2009.
The U.S. price of crude oil (West Texas Intermediate) has been between about $67 and $74 per barrel since mid-October. Crude prices are up to start this week as the fall of the Assad regime in Syria brings more instability in the Middle East. China also announced steps to increase economic growth, which would likely lead to more crude oil consumption – this is also putting some upward pressure on oil prices. Meanwhile, last week OPEC+ decided to extend its oil production cuts for another three months through March. While prices crude oil prices were bolstered a bit, markets are still concerned about an oversupply of oil.
Crude prices are impacted by economic news as well as geopolitical events around the world including the unrest in the Middle East and the war between Russia and Ukraine. In addition, production cuts by OPEC+ have tightened global crude oil supplies, which will continue to impact prices.
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 war between Russia and Ukraine. Russia is a top global oil producer, behind the U.S. and Saudi Arabia. Crude prices have been volatile after the attack on Israel by Hamas in October 2023. 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 $70 today compared to $70 a week ago and $71 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, 11% is refining, 18% distribution and marketing, and 16% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline in the U.S. edged up from 8.51 million b/d to 8.74 million b/d for the week ending November 29, according to the U.S. Energy Information Administration (EIA). This compares to 8.47 million b/d a year ago. Meanwhile, total domestic gasoline stocks rose slightly from 212.2 million barrels to 214.6, while gasoline production decreased last week, averaging 9.5 million barrels per day down from 9.7 million barrels the previous week.
Pump prices should continue to edge lower barring any supply issues or higher crude oil prices.
Quick stats
Oregon is one of 41 states and the District of Columbia with lower prices now than a week ago. Ohio (-16 cents) has the biggest week-over-week drop. Florida (+4 cents) has the largest week-over-week increase in the nation.
Hawaii ($4.56) has the most expensive gas in the nation for the sixth week in a row. California ($4.36) is second. These are the only two states in the country with averages still at or above $4 a gallon. This week 14 states and the District of Columbia have averages in the $3-range. There are 34 states with an average in the $2 range this week.
The cheapest gas in the nation is in Oklahoma ($2.52) and Texas ($2.60). No state has had an average below $2 a gallon since January 7, 2021, when Mississippi and Texas were below that threshold. At the time, the COVID-19 pandemic drove significant declines in crude oil and gasoline demand in the U.S. and around the world.
The difference between the most expensive and least expensive states is $2.04 this week, compared to $2.07 a week ago.
Oregon is one of 45 states and the District of Columbia with lower prices now than a month ago. The national average is seven cents less and the Oregon average is nine cents less than a month ago. Montana (-24 cents) has the largest month-over-month drop in the nation. New Jersey (+2 cents) has the largest month-over-month increase.
Oregon is one of 47 states and the District of Columbia with lower prices now than a year ago. The national average is 15 cents less and the Oregon average is 43 cents less than a year ago. This is the largest year-over-year drop in the nation. Florida (+11 cents) has the largest year-over-year increase.
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 declines three cents to $3.51 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average also loses three cents to $3.81. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $4.12 and the Oregon average was $4.53.
Source: AAA