Gas Prices Continue Decline

Gas prices have been steadily falling since mid-June with this week marking the sixth consecutive week of declines for the national and Oregon averages. Pump prices are down week-over-week in all 50 states due to lower crude oil prices and lackluster demand for gasoline in the U.S. For the week, the national average for regular slides 17 cents to $4.33 a gallon. The Oregon average drops 12 cents to $5.15.

The national average reached its record high of $5.016 on June 14 while the Oregon average reached its record high of $5.548 on June 15. Both averages have been steadily declining since then.

“Consumers appear to be filling up less at a time of year when demand is usually robust. The seasonally low demand combined with crude oil prices remaining below $100 per barrel are putting downward pressure on pump prices,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.

A new consumer survey from AAA shows that drivers are making significant changes to cope with high pump prices. Almost two-thirds (64%) of U.S. adults have changed their driving habits or lifestyle since March, with 23% making “major changes.” Drivers’ top three changes to offset high gas prices are driving less, combining errands, and reducing shopping or dining out. Other changes include delaying major purchases, postponing vacations and saving less money.

Find complete results in the AAA consumer gas price survey news release.

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 oil reached a recent high of $122.11 per barrel on June 8, then has been between $94 and $105 per barrel since July 5. Still, 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 $72 per barrel compared to $98 today.

Demand for gasoline in the U.S. rose slightly from 8.06 million b/d to 8.52 million b/d. However, that’s 800,000 b/d lower than last year and is in line with demand during the middle of July 2020, when COVID-19 restrictions curbed demand. Total domestic gas stocks increased by 3.5 million bbl to 228.4 million bbl for the week ending 15, according to the U.S. Energy Information Administration (EIA). This signals that low demand led to growth in inventory last week. If gas demand remains low as stocks increase, alongside a continuing reduction in crude prices, drivers will likely continue to see pump prices decline.

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 $4.36, 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.

Source: AAA

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