Geopolitical tensions surrounding Russia and whether it will invade Ukraine continue to keep crude oil prices elevated. Crude has surged above $90 per barrel, about $36 higher than a year ago. This is the major driver of higher pump prices, as about 53% of what we pay for in a gallon of gasoline is for the price of crude oil. For the week, the national average for regular rises four cents to $3.50 a gallon. The Oregon average gains three cents to $3.98.
he national average is at its highest price since August 2014; the Oregon average is the highest since July 2014.
Other factors contributing to higher pump prices include rising demand and shrinking supplies of gas in the U.S. Moderating winter weather and optimism over a potential fading of the omicron variant have led to the increase in gas demand.
“More drivers fueling up combined with a persistent tight supply of oil around the globe provide the recipe for higher pump prices. Unfortunately for consumers, it does not appear that this trend will change anytime soon,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
On average, about 53% of what we pay for in a gallon of gasoline is for the price of crude oil. 12% is refining, 21% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.
The concern that Russia will react to potential western sanctions by withholding crude oil from the already tight global market puts heavy upward pressure on oil prices. Russia is a member of OPEC+, and any sanctions based on Russia’s actions toward Ukraine may cause it to withhold crude oil from the global market.
The price of crude oil has risen dramatically in the last two months. It was about $65 per barrel on December 1 compared to $91 today on February 15. Oil supplies were already tight and demand is expected to increase this year as global economies emerge from the coronavirus pandemic.
U.S. gasoline demand rose from 8.23 million b/d to 9.13 million b/d. Total domestic gasoline stocks dropped by 1.6 million bbl to 248.4 million bbl last week, according to the U.S. Energy Information Administration (EIA). A decrease in total stocks and increased demand have contributed to upward pressure on pump prices, but rising crude prices continue to play the dominant role in pushing pump prices higher. Gas prices will likely increase as demand grows and crude oil prices remain above $90 per barrel.
With the Omicron variant, travel continues to be impacted by the coronavirus pandemic. Visit AAA.com/covidmap for an interactive map with the latest travel restrictions and policies for North America. Find AAA’s latest COVID-19 information for travelers here.
Oregon is one of 45 states and the District of Columbia where prices are higher now than a week ago. Delaware (+15 cents) has the largest weekly increase. Ohio (-3 cents) has the largest week-over-week decline.
California ($4.71) and Hawaii ($4.47) continue to have the most expensive gas prices in the country and are the only states in the nation with averages above $4 a gallon, while all 50 states and the District of Columbia have averages above $3 a gallon.
The cheapest gas in the nation is in Mississippi ($3.16) and Missouri ($3.17). This week no states have averages below $3 a gallon, same as a week ago. For the 58th week in a row, no state has an average below $2 a gallon.
Oregon is one of 48 states and the District of Columbia with higher prices now than a month ago. The national average is 19 cents more and the Oregon average is four cents more than a month ago. This is the 3rd– smallest monthly increase in the nation. Delaware (+33 cents) has the largest month-over-month increase. Utah (-6 cents) and Idaho (-3 cents) are the only states with month-over-month declines.
All 50 states and the District of Columbia have higher prices now than a year ago, and 22 states and D.C. have a current average that’s a dollar or more higher than a year ago. The national average is 99 cents more and the Oregon average is $1.19 more than a year ago. This is the second-largest yearly increase in the nation. California (+$1.23) has the biggest yearly increase. West Virginia (+78 cents) has the smallest year-over-year increase.