Gas prices are down for the fifth week in a row, with declines driven by lower crude oil prices and shrinking demand for gasoline in the U.S. Pump prices are down in all 50 states and most are seeing double-digit decreases. For the week, the national average for regular drops 16 cents to $4.50 a gallon. The Oregon average falls 12 cents to $5.27.
“Lower crude oil prices are a major driver of falling pump prices. Crude oil reached a recent high of $122.11 per barrel on June 8, then fell below $100 per barrel last week,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Another factor putting downward pressure on pump prices is lower domestic demand for gas, despite being in the heart of the summer driving season.”
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 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 prices remain higher than a year ago due to tight global supplies and the Russian invasion of Ukraine. A year ago, crude was around $66 per barrel compared to $98 today.
Demand for gasoline in the U.S. tumbled from 9.41 million b/d to 8.06 million b/d. Total domestic gas stocks increased by 5.8 million bbl. for the week ending July 8, according to the U.S. Energy Information Administration (EIA). The decrease in demand and declining oil prices have helped push pump prices down. If these supply and demand dynamics hold, drivers will likely continue to see price relief at the pump.
The EIA also reports that based on weekly estimates in its Weekly Petroleum Status Report, less gasoline has been consumed in the U.S. during the second quarter of 2022 and early July than during the same period in 2021. The latest Petroleum Supply Monthly confirms the trend, which shows that U.S. gasoline consumption (measured as product supplied) averaged 8.8 million b/d this April, or 0.4% less than during April 2021.
Consumers can still enjoy a tasty AAA gas price–related treat courtesy of Krispy Kreme Doughnuts. Running every Wednesday through Labor Day, Krispy Kreme will lower the price of a dozen Original Glazed donuts to the national average that AAA reports each Monday. A dozen glazed doughnuts typically cost around $12. This Wednesday’s dozen should cost $4.68, not including sales tax, and is available only in shop, drive-thru, or online pickup.
The West Coast region continues to have the most expensive pump prices in the nation with all seven states in the top 10. This is typical for the West Coast 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.