The recent surge in pump prices in other parts of the country caused by winter storms and robust holiday road travel may be hitting the brakes. Increases in the national average and impacted states have flattened, while other states, such as Oregon, are seeing prices dip. For the week, the national average for regular unleaded adds four cents to $3.27. The Oregon average loses four cents to $3.70. This is the largest weekly drop for a state in the nation.
“As we head toward February, pump prices will likely fall a little more, barring any supply disruptions or jolts in the global oil markets,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “However, the national average may have already bottomed out for the winter. The Oregon average may have more room to slip a little more before the seasonal increases begin.”
The national average fell to just under $3.10 on December 23, which was its lowest price this winter and for all of 2022. The lowest price for the Oregon average in 2022 was $3.74 on New Year’s Eve. The Oregon average has continued to decline a few cents since then.
The national average price started to rise daily on Christmas Eve. Increases started to slow late last week and then the national average lost a penny over the weekend and again last night. A winter storm that slammed much of the country late last month with snow, ice and frigid temperatures caused gas prices to spike, as refineries as far south as Texas and the Gulf Coast were forced to shut down temporarily. The storm also caused holiday travelers to fuel up and hit the road early to beat the bad weather, leading to a jump in overall gas demand.
Pump prices in Oregon and other West Coast states weren’t impacted as much, due to our distant location from the impacted refineries.
Crude oil prices began 2023 around $80 per barrel. This week, crude has fallen to around $75 per barrel. Crude prices have remained between about $71 and $81 for the last month, and were $78 a year ago. Crude reached a recent high of $122.11 per barrel on June 8. 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.
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. tumbled after Christmas from 9.33 million b/d to 7.51 million b/d for the week ending December 30. This compares to 8.17 million b/d a year ago. Total domestic gasoline stocks fell by 300,000 bbl to 222.7 million bbl. Lower gasoline demand has contributed to limiting increases in pump prices.
Oregon is one of only 14 states with lower prices week-over-week. Oregon (-4 cents) has the largest weekly drop, followed by Massachusetts (-3 cents) and Idaho (-3 cents). Ohio (+19 cents) has the largest week-over-week increase, followed by Colorado (+16 cents) and Wyoming (+16 cents). The average in Florida is flat.
Hawaii ($5.00) is the state with the most expensive gas in the nation for the seventh week in a row and is the only state with an average at or above $5 a gallon. California ($4.42) is second. These are the only two states with averages at or above $4 a gallon. This week 37 states and the District of Columbia have averages in the $3-range, and 11 states have averages below $3 a gallon.
The cheapest gas in the nation is in Georgia ($2.81) and Texas ($2.85). For the 104th week in a row, no state has an average below $2 a gallon.
The difference between the most expensive and least expensive states is $2.20 which continues to be stark.
Oregon is one of 27 states and the District of Columbia with lower prices now than a month ago. The national average is three cents less and the Oregon average is 34 cents less than a month ago. Oregon has the fourth-largest monthly decrease in the nation. Idaho (-43 cents), Utah (-41 cents), and Nevada (-35 cents) have the largest monthly declines. New Mexico (-1 cent) has the smallest. Wisconsin (+21 cents) and Ohio (+16 cents) have the largest monthly gains.
Oregon is one of 28 states and the District of Columbia with lower prices now than a year ago. The national average is three cents less and the Oregon average is 20 cents less than a year ago. Montana (-39 cents) has the largest year-over-year decline. Hawaii (+69 cents) has the biggest year-over-year rise.
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 for diesel loses four cents to $4.64 a gallon. The record high is $5.816 set on June 19. The Oregon average dips two cents to $4.77. The record high is $6.47 set on July 3. A year ago the national average for diesel was $3.59 and the Oregon average was $3.95.