Drivers are getting an early holiday gift as pump prices continue to plummet. They’re lower in all 50 states again this week, driven by lower crude oil prices, steady demand for gas and growing gasoline stocks. For the week, the national average for regular tumbles 14 cents to $3.38 a gallon. The Oregon average slides 26 cents to $4.16. Oregon has the second-largest weekly drop and sixth-largest monthly drop for a state in the nation.
At its meeting on Sunday, OPEC+, a group of 23 oil-producing nations, including Saudi Arabia and Russia, decided to maintain its output cuts of 2 million barrels per day, about 2% of world oil demand. The purpose of the move is to boost the global price of oil, which has fallen recently on fears of demand weakness, specifically in China where stringent COVID-19 lockdowns have led to reduced oil consumption in that nation.
Despite the decision from OPEC+, crude oil prices are at their lowest prices since December 2021, below $80 per barrel, and that’s helping to push pump prices lower.
“Gas prices are dropping sharply. The national average is poised to drop below $3 a gallon and the Oregon average below $4 a gallon by the end of the year,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “But with oil being the main ingredient in gasoline, the move by OPEC+ had the potential to slow this decline, but it hasn’t happened yet.”
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. In October, crude ranged between $82 and $92 per barrel. In November, crude ranged between $76 and $92 per barrel. The all-time high for WTI crude oil is $147.27 in July 2008.
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 $69 per barrel compared to $75 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 56% of what we pay for in a gallon of gasoline is for the price of crude oil, 20% is refining, 11% distribution and marketing, and 14% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline in the U.S. held steady at 8.3 million b/d for the week ending November 25. This compares to 8.8 million b/d at this time last year. Total domestic gasoline stocks rose by nearly 2.8 million bbl to 213.8 million bbl. Increasing supply and steady gasoline demand should continue to push pump prices lower barring any supply glitches.
Pump prices are lower this week in all 50 states and the District of Columbia. California (-28 cents) has the largest weekly drop, followed by Oregon (-26 cents), Delaware (-23 cents), Nevada (-22 cents), Washington (-22 cents), Alaska (-22 cents), Indiana (-21 cents), Arizona (-21 cents), Michigan (-20 cents) and Montana (-19 cents). Hawaii (-1 cent) has the smallest weekly decline.
Hawaii ($5.18) is the state with the most expensive gas in the nation for the second week in a row and is the only state with an average at or above $5 a gallon. California ($4.72) is second and Nevada ($4.44) is third. This week six states, including Oregon, have averages at or above $4, 34 states and the District of Columbia have averages in the $3-range, and 10 states have averages below $3 a gallon.
The cheapest gas in the nation is in Texas ($2.78) and Oklahoma ($2.86). For the 100th week in a row, no state has an average below $2 a gallon.
The difference between the most expensive and least expensive states is $2.40 which continues to be stark.
All 50 states and the District of Columbia have lower prices now than a month ago. The national average is 42 cents less and the Oregon average is 68 cents less than a month ago. Oregon has the sixth-largest monthly decrease in the nation. Wisconsin (-86 cents) has the largest monthly decline. Hawaii (-2 cents) has the smallest.
Oregon is one of 32 states and the District of Columbia with higher prices now than a year ago. The national average is two cents more and the Oregon average is 38 cents more than a year ago. This is the fifth-largest year-over-year increase in the nation. Hawaii (+85 cents), Nevada (+52 cents), Washington (+40 cents), and Alaska (+39 cents) have the largest yearly gains. Colorado (-30 cents) has the biggest year-over-year decline.
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.
Refinery issues in California in September and October exacerbated the situation, creating extremely tight supplies and causing pump prices in this region to skyrocket.
For the week, the national average loses 14 cents to $5.06 a gallon. The record high is $5.816 set on June 19. The Oregon average falls 18 cents to $5.27. The record high is $6.47 set on July 3. A year ago the national average for diesel was $3.62 and the Oregon average was $3.80.