Despite typical seasonal low demand for gasoline, pump prices are ticking up. The driving force is the rising cost of crude oil which is around $85 per barrel, about $20 more than in November. For the week, the national average for regular rises two cents to $3.34 a gallon. The Oregon average edges up half a cent to $3.93. This is the second-smallest weekly increase for a state average in the country.
The Oregon average is now at its highest price since July 2014. The national average is at its highest price since December 2021.
“The price of crude oil has skyrocketed from about $65 to $85 per barrel since December 1 based on the belief that demand for crude will rise this year due to expanding economies around the world,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
Last week, both OPEC and U.S. energy officials said the COVID-19 omicron variant is no longer expected to slow the continued recovery of petroleum demand in 2022. Despite this, OPEC and its allies are maintaining their planned modest production increases and will not dramatically ramp up output. The result will be a continued tight supply of oil.
U.S. gasoline demand rose slightly by 7.91 million b/d to 8.22 million b/d. The slight increase still puts gas demand in the average range for the winter driving season. Total domestic gasoline stocks rose by 5.9 million bbl to 246.6 million bbl last week, according to the U.S. Energy Information Administration (EIA). Typically, pump prices drop due to low gas demand and a rise in supply, but a steady increase in the price of crude oil has prevented this from happening. As oil prices continue to climb, pump prices will likely follow suit.