Pump prices are down in Oregon and across the country for the ninth week in a row. Crude oil prices remain below $100 per barrel and demand for gas is lower than a year ago. These factors continue to put downward pressure on pump prices. For the week, the national average for regular loses eight cents to $3.95 a gallon. The Oregon average dips four cents to $4.87.
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. The major drivers of lower pump prices have been falling crude oil prices and a few weeks of seasonally low demand for gas.
“Falling pump prices may eventually entice drivers to hit the road but it’s not happening yet. It appears drivers are waiting for lower prices before going back to their typical driving habits,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
A recent survey from AAA showed that Americans have changed their driving habits to cope with high gas 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.
Demand for gasoline in the U.S. rose from 8.54 million b/d to 9.12 million b/d last week. However, the rate is 307,000 b/d lower than last year. Also, total domestic gasoline stocks decreased by 5 million bbl to 220.3 million bbl, according to the U.S. Energy Information Administration (EIA). Although gasoline demand has risen and supplies have tightened, easing oil prices have helped lower pump prices. If oil prices edge lower, drivers will likely see falling pump prices.
Crude oil prices continue to fall due to fears of economic slowdowns elsewhere around the globe. Crude reached a recent high of $122.11 per barrel on June 8, and ranged from about $94 to $110 in July. This month, crude has ranged between about $88 and $94. Crude prices rose dramatically leading up to and in the first few months of Russia’s invasion of Ukraine. Russia is one of the world’s top oil producers and its involvement in a war causes market volatility, and sanctions imposed on Russia by the U.S. and other western nations resulted in tighter global oil supplies. Oil supplies were already tight around the world as demand for oil increased as pandemic restrictions eased. A year ago, crude was around $67 per barrel compared to $87 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 $3.96, 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.
For the week, the national average loses 10 cents to $5.02 a gallon. The record high is $5.816 set on June 19. Oregon’s average falls 12 cents to $5.71. The record high is $6.47 set on July 3. A year ago the national average for diesel was $3.30 and the Oregon average was $3.72.