Gas prices continue to slide with 39 states, including Oregon, seeing double-digit decreases this week. But an uptick in gas demand as more people fuel up could slow or even end the steady declines in pump prices. For the week, the national average for regular tumbles 14 cents to $4.19 a gallon. The Oregon average slides a dime to $5.05.
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.
“A recent survey from AAA showed that Americans have changed their driving habits to cope with high gas prices. Now with gas below $4 a gallon at nearly half of the gas stations around the country, increasing demand could slow or even end the daily gas price declines,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
The 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.
The national and Oregon averages for regular gas have been falling since mid-June with this week marking the seventh consecutive week of declines. The major drivers of lower pump prices have been falling crude oil prices and a few weeks of seasonally low demand for gas.
Demand for gasoline in the U.S. rose from 8.52 million b/d to 9.25 million b/d last week. The estimated rate is 80,000 b/d lower than last year, but it could slow pump price decreases if the trend holds. Additionally, total domestic gasoline stocks decreased by 3.3 million bbl to 225.1 million bbl, signaling that higher demand reduced inventory last week.
Crude oil reached a recent high of $122.11 per barrel on June 8, then has been between $93 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. Russia is one of the world’s top oil producers and its involvement in a war causes market volatility. A year ago, crude was around $71 per barrel compared to $96 today.
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.
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 $4.21, 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 six of the 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.