Oregon and other West Coast states are seeing some of the biggest weekly decreases in the nation. Gasoline supplies in the area are returning to normal as regional refinery issues are resolved. In addition, falling crude oil prices and demand for gas in the U.S. are also helping to push pump prices lower. For the week, the national average for regular loses five cents to $3.87 a gallon. The Oregon average plummets 22 cents to $5.30. This is the second-largest weekly drop for a state in the nation.
The Oregon average came within a penny of reaching a new record high this month when it got to $5.54 a gallon. It has decreased 24 cents since then. Both the national and Oregon averages hit record highs in mid-June, then declined for 14 consecutive weeks before rising again for the last three weeks. 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.
“Pump prices on the West Coast soared last month after several California refineries underwent planned or unplanned maintenance creating a huge drop in supplies in this region. The situation is getting back to normal and pump prices in this region should continue to decline, barring unforeseen events,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
Crude oil prices are again below $90 per barrel due to global economic concerns. Crude reached a recent high of $122.11 per barrel on June 8, and ranged from about $94 to $110 per barrel in July. In August, crude prices ranged between about $86 and $97. In September, crude prices ranged between about $76 and $88 per barrel. So far in October, crude has ranged between $81 and $93 per barrel.
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 $82 per barrel compared to $83 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.
Demand for gasoline in the U.S. decreased from 9.47 million b/d to 8.28 million b/d for the week ending October 7. This is significantly less than a year ago at this time when demand was 9.2 million b/d. Total domestic gasoline stocks increased by 2 million bbl to 209.5 million bbl. Falling demand and increasing stocks should put downward pressure on pump prices, especially with decreasing crude oil prices.
Oregon is one of 32 states with lower prices now than a week ago. California (-29 cents) has the largest weekly drop in the nation. Oregon (-22 cents) has the second-largest week-over-week decline. Florida (+6 cents) has the largest weekly increase.
California ($6.00) has the most expensive gas in the country for the sixth week in a row and is the only state with an average at or above $6 a gallon. Six states, including Oregon, have averages at or above $5 a gallon. This week 13 states have averages at or above $4, and 37 states and the District of Columbia have averages in the $3-range.
The cheapest gas in the nation is in Georgia ($3.25) and Texas ($3.29). For the 93rd week in a row, no state has an average below $2 a gallon.
The difference between the most expensive and least expensive states is $2.75 which is stark.
Oregon is one of 40 states with higher prices now than a month ago. The national average is 19 cents more and the Oregon average is 65 cents more than a month ago. Oregon has the second-largest monthly increase in the nation. Alaska (+75 cents) has the largest month-over-month jump. New York (-11 cents) has the largest monthly drop.
All 50 states and the District of Columbia have higher prices now than a year ago. The national average is 55 cents more and the Oregon average is $1.53 more than a year ago. This is the second-largest yearly increase in the nation. Alaska (+$1.70) has the biggest yearly increase. Connecticut (+8 cents) has the smallest year-over-year increase.
he 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.
Refinery issues in California in September and earlier this month exacerbated the situation, creating extremely tight supplies and causing pump prices in this region to soar.