Central Oregon and US gas prices are at their lowest levels since the summer of 2021, AAA Oregon/Idaho says
(Update: adding video and comments by AAA)
PORTLAND, Ore. (KTVZ) -- Gas prices are in the winter doldrums in most states, including Oregon, this week, with minimal changes in their averages, but AAA Oregon/Idaho says it's the lowest prices we've seen in 2 1/2 years.
The recent dip in prices is likely due to winter weather, which can impact demand, refining operations and gasoline distribution.
Some states with extreme weather have actually seen prices climb. So for the week, the national average for regular inches up a cent, to $3.08 a gallon. The Oregon average dips four cents to $3.63.
“We normally see the lowest gas prices of the year in December and January, and this pattern is holding firm this year,” says Marie Dodds, public affairs director for AAA Oregon/Idaho, said Wednesday. “Gas prices will likely stay close to their current prices for the next couple of weeks, if crude oil prices don’t rise.”
The national average is at its lowest price since June 2021. The Oregon average is at its lowest price since July 2021.
Here in Central Oregon, the price is down nine cents from last year at this time, coming in at $3.57 per gallon.
Despite prices being lower in the winter months, Dodds said, "I would expect us to stay in this pattern where we see prices hover around their current levels, they can climb 75 cents from a winter low to a spring high. But I don't anticipate that we'll see things really start to heat up again for at least a couple more weeks."
Almost all Oregon counties have averages below $4 a gallon. The only counties with averages at or above $4 are:
Coos $4.05
Curry $4.26
Gas prices normally rise in the first and/or second quarters of the year. The factors include refinery maintenance season, the normal seasonal growth in demand, and the switch from winter-blend fuel to summer-blend, which is more expensive to produce. 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.
Dodds says, “during the winter months, we all buy what is known as winter blend fuel. It is cheaper to produce than summer blend fuel.” Oregon is one of 30 states with lower gas prices compared to a week ago and that's partly due to weather.
Dodds says, "normally when we get hit with winter weather, we see demand drop. And that's certainly what has happened over the last couple of weeks. That puts downward pressure on pump prices."
Crude oil prices continue to be volatile on concerns surrounding mounting geopolitical tensions in the Middle East after attacks on commercial vessels in the Red Sea. The conflict between Israel and Hamas has led to additional violence in the West Bank, Lebanon, Syria and Iraq. While Israel and the Palestinian territory are not oil producers, there’ve been concerns that the conflict could spread in the Middle East, which could potentially impact crude production in other oil-producing nations in the region.
Crude oil is trading around $74 today compared to $73 a week ago and $82 a year ago. In 2023, West Texas Intermediate ranged between $63 and $95 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, 8% is refining, 20% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.
Demand for gas in the U.S. decreased slightly from 8.33 to 8.27 b/d for the week ending January 13, according to the U.S. Energy Information Administration (EIA). This compares to 8.05 million b/d at the same time last year. Meanwhile, total domestic gasoline stocks increased by 3.1 million bbl to 248.1 million bbl.
Fluctuating oil prices, alongside decent demand, have put upward pressure on pump prices, but price gains have been capped due to rising stock levels. If oil prices continue to see upward pressure, drivers could see pump prices increase steadily in the weeks ahead.
Quick stats
Oregon is one of 30 states with lower prices now than a week ago. Ohio (+22 cents) has the largest week-over-week gain. Idaho (-9 cents has the biggest weekly drop. The average in Georgia is flat. Only two states have seen prices change by 10 cents or more in the last week.
Hawaii ($4.67) has the most expensive gas in the nation for the second week in a row. California ($4.50) is second. These are the only two states with averages at or above $4, down from three states a week ago. This week, Washington ($3.97) is third, dropping below the $4 mark. This week 21 states and the District of Columbia have averages in the $3-range. Twenty-seven states have averages in the $2 range this week.
The cheapest gas in the nation is in Oklahoma ($2.58) and Colorado ($2.63). 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 $2.11 a week ago.
Oregon is one of 44 states and the District of Columbia with lower prices now than a month ago. The national average is four cents less and the Oregon average is 18 cents less than a month ago. This is the seventh-largest monthly drop in the nation. Idaho (-30 cents) has the largest monthly drop. Ohio (+21 cents) has the largest month-over-month increase.
Oregon is one of 49 states and the District of Columbia with lower prices now than a year ago. The national average is 34 cents less and the Oregon average is seven cents less than a year ago. Colorado ($1.03) has the largest yearly decrease. California (+5 cents) is the only state with a year-over-year 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.
As mentioned above, Hawaii has the most expensive gas in the country for the second week in a row. California, Washington, Nevada, Oregon, and Alaska round out the top six. Arizona is 16th. Oregon is fifth most expensive for the 14th week in a row.
Like many other states in the nation, six of the seven states in the West Coast region are seeing week-over-week declines. California (-6 cents) has the largest weekly drop in the region. Arizona (-5 cents) Nevada (-5 cents), Washington (-4 cents), Oregon (-3 cents), and Alaska (-2 cents) also have week-over-week declines. Hawaii (+2/10ths of a cent) is the only state in the region with a weekly increase.
The refinery utilization rate on the West Coast fell slightly from 85.9% to 85.5% for the week ending January 12. This rate has ranged between about 73% to 96% in the last year. The latest national refinery utilization rate decreased slightly from 92.9% to 92.6%.
According to EIA’s latest weekly report, total gas stocks in the region rose from 29.49 million bbl. to 30.32 million bbl.
A lower refinery utilization rate can put upward pressure on pump prices, while an increase in gasoline stocks can put downward pressure on pump prices.
Oil market dynamics
Crude oil prices rose last week after supply outages due to winter storms caused market concern about tight supply to meet demand. Crude prices were up to start this week on concerns of unrest in the Middle East and the war in Ukraine and their impact on global oil supplies. Additionally, the EIA reported that total domestic commercial crude stocks decreased by 2.5 million bbl to 429.9 million bbl.
At the close of Friday’s formal trading session, WTI slipped 67 cents to settle at $73.41. At the close of Monday’s formal trading session, WTI rose $1.78 to settle at $75.19. Today crude is trading around $74 compared to $73 a week ago. Crude prices are about $6 lower than a year ago.
Drivers can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.
Recommendations
With many more weeks of possible inter weather on the way,Triple A recommends being prepared as best as you can. Dodds says, “because of some of the delays in deliveries of gasoline in the Bend area, it's really important for consumers to make sure that they keep their gas tanks at least half full, especially if winter weather is in the forecast. And likewise with electric vehicle owners”
