Gas prices continue to edge down, falling at a steady pace. Thousands of gas stations across the country are selling regular gas for less than $3 a gallon. Here in Oregon, we have a growing number of markets with gas at $3.99 or less. The primary drivers of falling gas prices are flat demand for gas in the U.S. and lower costs for oil. For the week, the national average for regular dips seven cents to $3.41 a gallon. The Oregon average loses eight cents to $4.26.
The national average has lost 47 cents since its year-to-date high of $3.88 on September 18. The Oregon average has fallen 51 cents since its year-to-date high of $4.77 on August 30. The national average is at its lowest price since March. The Oregon average is at its lowest price since May.
Seven Oregon counties have averages below $4 a gallon: Benton ($3.96), Hood River ($3.99), Jefferson ($3.89), Lincoln ($3.86), Linn ($3.99), Morrow ($3.95), Umatilla ($3.99).
“For now, drivers are enjoying lower gas prices with every fill-up. However, the big question mark remains volatile crude oil prices. If the cost of oil rises again, pump price increases will likely follow,” Marie Dodds, public affairs director for AAA Oregon/Idaho.
Crude oil prices have been volatile since the start of the conflict between Israel and Hamas last month. Fears that the conflict could escalate across the Middle East sent crude oil prices near $90 per barrel in October. This week, crude prices have fallen into the upper-$70s. While Israel and the Palestinian territory are not oil producers, concerns remain that the conflict has the potential to spread across the Middle East, which could impact crude production in other oil-producing nations in the region.
Crude oil prices tend to rise when there are geo-political events involving oil producers. Crude prices spiked after the invasion of Ukraine by Russia last year because Russia is one of the world’s top oil producers, behind the U.S. and Saudi Arabia. Crude prices also surge on news of production cuts by major oil producers. Crude oil prices spiked above $90 per barrel in mid-September, the highest price since last November, in response to the announcement from Saudi Arabia and Russia that they would keep their production cuts in place through 2023. The cuts are one million barrels a day by Saudi Arabia and 300,000 barrels a day by Russia.
Gas prices normally decline in the fall, in part due to a drop in demand for gasoline compared to the summer months and the switch from summer-blend gas to winter-blend gas. Winter-blend gas is cheaper to produce than summer-blend fuel as it contains ingredients such as butane, so gas prices normally fall when the switch occurs. Summer-blend gas helps reduce emissions from gasoline during the warm summer months. More info on summer- and winter-blend gasoline can be found at the EPA website. The switch occurs on September 15 except California, which normally keeps summer-blend gasoline until October 31. This year, California allowed the switch to occur earlier because of refinery issues in that state that sent pump prices soaring on the West Coast in late September.
Crude oil is trading around $78 today compared to $81 a week ago and $92 a year ago. So far this year, West Texas Intermediate has ranged between $63 and $94 per barrel. 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 50% of what we pay for in a gallon of gasoline is for the price of crude oil, 25% is refining, 11% distribution and marketing, and 14% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline decreased slightly from 8.86 to 8.7 million b/d for the week ending October 27, according to the U.S. Energy Information Administration (EIA). This compares to 8.66 million b/d a year ago. Meanwhile, total domestic gasoline stocks remained flat at 223.5 million bbl.
Lower gas demand, alongside declining oil prices, has contributed to pushing pump prices down. If the price of oil remains low, drivers can expect to see further price drops.
Oregon is one of 49 states and the District of Columbia with lower prices now than a week ago. Montana (-17 cents has the biggest weekly drop. Hawaii (-1 cent) has the smallest weekly decline. Michigan (+14 cents) is the only state with a week-over-week increase.
California ($5.14) has the most expensive gas in the nation for the 15th week in a row and is the only state with an average at or above $5 a gallon. Hawaii ($4.75) is second, Washington ($4.59) is third, Nevada ($4.47) is fourth, Oregon ($4.26) is fifth, and Alaska ($4.16) is sixth. These are the six states with averages at or above $4, same as last week. This week 38 states and the District of Columbia have averages in the $3-range. Six states have averages in the $2 range this week.
The cheapest gas in the nation is in Texas ($2.87) and Georgia ($2.89). No state has had an average below $2 a gallon since January 7, 2021, when Mississippi and Texas were below that threshold.
The difference between the most expensive and least expensive states is $2.27 this week, compared to $2.31 a week ago.
All 50 states and the District of Columbia have lower prices now than a month ago. The national average is 31 cents less and the Oregon average is 40 cents less than a month ago. Oregon has the 10th-largest monthly drop for a state in the nation. California (-69 cents) has the largest monthly drop. Hawaii (-10 cents) has the smallest.
All 50 states and the District of Columbia have lower prices now than a year ago. The national average is 40 cents less and the Oregon average is 58 cents less than a year ago. This is the ninth-largest yearly drop in the nation. Indiana (-95 cents) has the largest yearly decrease. Colorado (-10 cents has the smallest yearly decline.
For the week, the national average falls seven cents to $4.39 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average loses six cents to $4.87. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $5.34 and the Oregon average was $5.56.