Gas prices continue their downward movement in all 50 states as the holidays approach. Most gas stations in Oregon are now selling regular gas for less than $4 a gallon, and nationwide, about 60% of all fuel locations have gas below $3 a gallon. Lower crude oil costs and the typical lower demand for gas this time of year are the driving factors behind lower pump prices. For the week, the national average for regular drops nine cents to $3.14 a gallon. The Oregon average falls eight cents to $3.91.
“Drivers are enjoying lower pump prices in time for holiday shopping and travel. Gas prices should continue to decline this month, as holiday travelers hit the road for Christmas and New Year’s,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
The national average is at its lowest price since December 2022. The Oregon average is at its lowest price since last March.
The national average for regular has been steadily falling since reaching its year-to-date high of $3.88 on September 18. The Oregon average has been moving lower since reaching its year-to-date high of $4.77 on August 30.
Twenty-two Oregon counties have averages below $4 a gallon.
Crude oil prices declined just a week after OPEC+ (Organization of the Petroleum Exporting Countries and allies such as Russia) announced additional voluntary oil production cuts of 900,000 barrels a day, and Saudi Arabia said it would continue its cuts of a million barrels a day through March. Crude oil prices jumped ahead of the announcement, but then fell and have remained in the upper $60s to lower $70s.
Crude oil prices were volatile at the start of the conflict between Israel and Hamas in October. Fears that the conflict could escalate across the Middle East sent crude oil prices near $90 per barrel in October. Crude prices fell into the $70s on November 7, and dipped below $70 last week. While Israel and the Palestinian territory are not oil producers, there were concerns that the conflict could spread in 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 $69 today compared to $72 a week ago and $73 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 57% of what we pay for in a gallon of gasoline is for the price of crude oil, 7% is refining, 22% distribution and marketing, and 14% are taxes, according to the U.S. Energy Information Administration.
Demand for gas in the U.S. increased slightly from 8.21 to 8.47 million b/d for the week ending December 1, according to the U.S. Energy Information Administration (EIA). This compares to 8.36 million b/d at the same time last year. Meanwhile, total domestic gasoline stocks increased significantly by 5.4 million bbl to 223.6 million bbl.
Relatively low gas demand and supply growth have helped push pump prices lower. If oil prices remain low, drivers can expect pump prices to do the same during the holiday season.
Quick stats
All 50 states and the District of Columbia have lower prices now than a week ago. Florida (-16 cents has the biggest weekly drop. Hawaii (-1 cent) has the smallest.
California ($4.70) has the most expensive gas in the nation for the 20th week in a row. Hawaii ($4.70) is second, Washington ($4.26) is third, and Nevada ($4.02) is fourth. These are the four states with averages at or above $4, same as a week ago. This week 23 states and the District of Columbia have averages in the $3-range. Twenty-three states have averages in the $2 range this week.
The cheapest gas in the nation is in Texas ($2.60) and Mississippi ($2.67). 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 $2.10 this week, compared to $2.07 a week ago.
Oregon is one of 48 states and the District of Columbia with lower prices now than a month ago. The national average is 23 cents less and the Oregon average is 30 cents less than a month ago. Utah (-55 cents) has the largest monthly drop. Hawaii (-4 cents) has the smallest. Georgia (+16 cents) and Delaware (+3 cents) are the only states with month-over-month increases.
Oregon is one of 47 states and the District of Columbia with lower prices now than a year ago. The national average is 13 cents less and the Oregon average is nine cents less than a year ago. Utah (-64 cents) has the largest yearly decrease. California (+17 cents has the largest yearly increase.
West Coast
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. 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 falls nine cents to $4.09 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average loses eight cents to $4.52. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $4.92 and the Oregon average was $5.11.
Source: AAA