Gas prices have either remained flat or risen every day in the last month, setting multiple new record highs. But demand for gasoline in the U.S. has increased to 9 million barrels a day, which is typical for this time of year. For the week, the national average for regular jumps eight cents to $4.60 a gallon. The Oregon average jumps 10 cents to $5.16.
All 50 states have averages above $4 a gallon and six states, including Oregon, have averages above $5. California remains the only state with an average above $6. The national and Oregon averages continue to set new record highs almost daily, eclipsing the recent record highs set in March.
The Memorial Day holiday weekend will be a busy one, despite the soaring gas prices. AAA predicts 39.2 million people (11.8% of the population) will travel 50 miles or more from home this Memorial Day weekend. This is an increase of 8.3% over 2021, bringing travel volumes almost in line with those in 2017.
In the Pacific Region, Region (AK, CA, HI, OR, WA), 6.7 million people (12.5% of the population) are expected to travel, an 8.1% increase compared to 2021. About 530,000 Oregonians will travel over the long weekend.
While 89% of Memorial Day travelers will drive to their destinations, air travel continues to rebound, up 25% over last year, the second-largest increase since 2010. Gas prices will be the most expensive ever for the holiday.
“Gasoline is more than a dollar per gallon higher now than it was on February 24, when Russia invaded Ukraine. That sent shock waves through the global oil market and crude prices have remained significantly elevated ever since,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Even with record high pump prices, demand for gas is rising as more drivers hit the road, despite the pain they’re feeling at the pumps.”
Higher crude oil prices result in higher pump prices since oil is the main ingredient in gasoline and diesel. 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.
Crude oil prices remain elevated due to the Russian invasion of Ukraine. Russia is one of the top three oil producers in the world, behind the U.S. and Saudi Arabia, and about 25% of Europe’s oil is imported from Russia. Tight global oil supplies made worse by the lack of product coming out of Russia have put upward pressure on crude prices. A year ago, crude was around $66 per barrel compared to $110 today.
Demand for gasoline in the U.S. rose from 8.7 million b/d to 9 million b/d. Total domestic gasoline stocks decreased by 4.8 million bbl to 220.2 million bbl last week, according to the U.S. Energy Information Administration (EIA). Tighter supply and increased demand have pushed pump prices higher. This supply/demand dynamic and volatile crude prices will keep upward pressure on pump prices.
Meanwhile, the switch to the more expensive summer blend of gasoline, which usually adds seven to ten cents per gallon depending on the market, is happening now. This switchover should be complete nationwide by early June. This summer blend switch is an annual event. It is unrelated to the Biden Administration’s announcement a few weeks ago to allow the higher ethanol E15 gas blend to remain on sale throughout the summer until September.