Crude oil prices below $80 per barrel continue to put downward pressure on pump prices. While the national average has been steadily declining for more than a week, prices in most West Coast states continue to rise for now; however, prices in this region are expected to hit their spring peak soon. For the week, the national average for regular loses six cents to $3.60 a gallon. The Oregon average ticks up two cents to $4.12.
“The national average climbed to nearly $3.69 on April 20 and has fallen steadily since then. The Oregon average has continued to edge up and is at its year-to-date high today of nearly $4.12,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Gas prices normally reach their spring peak sometime in May.”
Crude oil prices fell below $80 per barrel on April 19 and have remained in the $70s per barrel since then. Oil prices rose above $80 per barrel after the April 2 announcement from the Organization of the Petroleum Exporting Countries and other major oil producers, including Russia, known collectively as OPEC+, that the cartel would cut oil production by just over 1 million b/d through the end of 2023.
“As long as crude oil prices keep wobbling in the $70s per barrel, we can expect pump prices to settle down, barring other events that disrupt supplies,” adds Dodds.
Crude oil is trading around $72 today compared to $75 a week ago and $105 a year ago. In March, West Texas Intermediate ranged between about $64 and $81 per barrel. In February, WTI ranged between about $73 and $80 per barrel. In January, WTI ranged between about $73 and $82 bbl. Crude reached recent highs of $123.70 on March 8, 2022, shortly after the Russian invasion of Ukraine, and $122.11 per barrel on June 8, 2022. The all-time high for WTI crude oil is $147.27 in July 2008.
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.
A factor that always puts upward pressure on pump prices in the spring is the seasonal switch to summer-blend fuel. California has an April 1 deadline to switch to summer-blend fuel, while the federally mandated deadline is May 1. The West Coast region often sees prices climb earlier than other parts of the country because of that earlier California deadline. This fuel is more environmentally friendly but more expensive to produce. More info on summer- and winter-blend gasoline can be found at the EPA website.
U.S. refineries often go off-line or have reduced output ahead of these seasonal switchovers so that maintenance can occur. Refineries continue to return to service from extensive winter/spring maintenance. More refinery operations will be restarted in the next few weeks, with some planned work extending into June.
Demand for gasoline in the U.S. demand increased significantly from 8.52 to 9.51 million b/d for the week ending April 21. The spike in demand surprised market observers, but the estimate could be revised when EIA releases final demand measurements for April. This compares to 8.74 million b/d a year ago. Meanwhile, total domestic gasoline stocks decreased by 2.4 million bbl to 221.1 million bbl. Higher demand, alongside a decline in stocks, would typically push pump prices up; however, fluctuating oil prices have pushed them lower. If oil prices continue to decline, pump prices will likely follow suit.
Quick stats
Oregon is one of 10 states with higher prices now than a week ago. Utah (+10 cents) has the largest weekly jump. All other increases are a nickel or less. Michigan (-12 cents) has the largest weekly drop.
California ($4.86) has the most expensive gas in the nation for the ninth week in a row. Hawaii ($4.78) is second, Arizona ($4.70) is third, Washington ($4.59) is fourth, Nevada ($4.25) is fifth, Oregon ($4.12) is sixth, and Illinois ($4.03) is seventh. These are the seven states with averages at or above $4 a gallon. This week 43 states and the District of Columbia have averages in the $3-range. No states have averages in the $2 range this week, same as a week ago.
The cheapest gas in the nation is in Mississippi ($3.07) and Texas ($3.15). For the 1209th week in a row, no state has an average below $2 a gallon.
The difference between the most expensive and least expensive states is $1.79 this week, compared to $1.76 a week ago.
Oregon is one of 43 states and the District of Columbia with higher prices now than a month ago. The national average is nine cents more and the Oregon average is 20 cents more than a month ago. Arizona (+41 cents) has the largest monthly jump. Indiana (-8 cents) has the largest month-over-month decline. The average in Louisiana is flat.
Oregon is one of 49 states and the District of Columbia with lower prices now than a year ago. The national average is 60 cents less and the Oregon average is 57 cents less than a year ago. California (-88 cents) has the largest yearly drop. Arizona (+14 cents) is the only state with a year-over-year increase. A year ago, pump prices were rising rapidly after the start of the Russian invasion of Ukraine.
West Coast
The West Coast region continues to have the most expensive pump prices in the nation with all seven states in the top 10. It’s typical for the West Coast to have six or seven states in the top 10 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.
Diesel
For the week, the national average loses six cents to $4.11 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average dips two cents to $4.55. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $5.32 and the Oregon average was $5.45.
Source: AAA