Oregon gas prices fall for 14th straight week, reach lowest level in six months, AAA says
PORTLAND, Ore. (KTVZ) – The national and Oregon gas prices averages have fallen for 14 weeks in a row and are at their cheapest prices since early March, AAA Oregon/Idaho said Tuesday.
Lower crude oil prices, lackluster demand for gas in the U.S., and the switch to winter blend fuel are the major drivers of lower pump prices. For the week, the national average for regular slips three cents to $3.67 a gallon. The Oregon average loses four cents to $4.64.
The national average reached its record high of $5.016 on June 14 while the Oregon average reached its record high of $5.548 on June 15. Both averages have been steadily declining since then.
“The switch to less expensive winter blend gasoline is putting a bit more downward pressure on pump prices this month; however, some factors have the potential to push prices higher, including the ongoing war in Ukraine, refinery maintenance, and the possibility of a hurricane that impacts oil and gas infrastructure, refining and transportation,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Although AAA expects gas prices to continue to decline during the fall months, it’s possible we could see prices rise briefly at times.”
Most of the country is now using less expensive winter blend gasoline, so modest pump price reductions have occurred. On September 15, many refiners switch from summer-blend gasoline to winter-blend. The summer-blend gas has a lower Reid vapor pressure, meaning it doesn’t evaporate as easily and is more environmentally friendly during the hot summer months. In California, this switch occurs on November 1.
Crude oil prices have tumbled from recent highs due to fears of economic slowdowns elsewhere around the globe. Crude reached a recent high of $122.11 per barrel on June 8, and ranged from about $94 to $110 per barrel in July. In August, crude prices ranged between about $86 and $97. So far in September, crude prices have been between about $81 and $89 per barrel.
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. A year ago, crude was around $70 per barrel compared to $84 today.
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 53% of what we pay for in a gallon of gasoline is for the price of crude oil, 12% is refining, 21% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline in the U.S. decreased from 8.73 million b/d to 8.49 million b/d last week. Thisis lower than last year at this time when demand was at 8.89 million b/d. Total domestic gasoline stocks declined by 1.8 million bbl to 213 million bbl., according to the U.S. Energy Information Administration (EIA). Although gasoline demand has decreased, fluctuating oil prices have led to smaller pump price decreases. If oil prices spike, the national average will likely reverse as pump prices increase.
Quick stats
Oregon is one of 37 states and the District of Columbia with lower prices now than a week ago, and nine states have double-digit declines. Rhode Island (-14 cents) has the largest weekly drop. Nevada (-2/10ths of a cent) has the smallest. Iowa (+14 cents) has the largest weekly jump. Wisconsin (+2/10ths of a cent) has the smallest weekly increase.
California ($5.46) has the most expensive gas in the country for the second week in a row. California and Hawaii ($5.27) remain the only two states with an average at or above $5 a gallon, same as a week ago. This week eight states, including Oregon, have averages at or above $4, and 42 states and the District of Columbia have averages in the $3-range.
The cheapest gas in the nation is in Mississippi ($3.10) and Louisiana ($3.14). For the 89th week in a row, no state has an average below $2 a gallon.
Oregon is one of 49 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 18 cents less than a month ago. Oregon has the 13th-smallest monthly decrease in the nation. Connecticut (-60 cents) has the largest monthly drop. California (+12 cents) is the only state with a month-over-month increase. Nevada is the only state where the current price is the same as a month ago.
All 50 states and the District of Columbia have higher prices now than a year ago. The national average is 48 cents more and the Oregon average is 89 cents more than a year ago. This is the 5th-largest yearly increase in the nation. Hawaii (+$1.21) has the biggest yearly increase. Colorado (+13 cents) has the smallest year-over-year increase.
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. 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.
| Rank | Region | Price on 9/20/22 | ||
| 1 | California | $5.46 | ||
| 2 | Hawaii | $5.27 | ||
| 3 | Nevada | $4.92 | ||
| 4 | Oregon | $4.64 | ||
| 5 | Alaska | $4.64 | ||
| 6 | Washington | $4.62 | ||
| 7 | Idaho | $4.40 | ||
| 8 | Utah | $4.24 | ||
| 9 | Arizona | $3.98 | ||
| 10 | Montana | $3.93 |
As mentioned above, California is the most expensive state for the second consecutive week. Hawaii, Nevada, Oregon, Alaska and Washington round out the top six. Arizona is ninth. Oregon rises to fourth after seven weeks at fifth.
Six of the seven states in the region are seeing lower prices this week. Alaska (-6) has the largest weekly decline in the West Coast region. Oregon (-4 cents), Arizona (-4 cents), Washington (-3 cents), Hawaii (-1 cent) and Nevada (-2/10ths of a cent) are the other states in the region with week-over-week decreases. California (+3 cents) has a week-over-week increase.
The refinery utilization rate on the West Coast fell from 88.1% to 83.8% for the week ending September 9. This decline is largely due to refinery maintenance. The rate has ranged between about 76% and 90% in the last year.
According to EIA’s latest weekly report, total gas stocks in the region decreased from 25.97 million bbl to 25.66 million bbl.
Oil market dynamics
While a strengthening dollar helped to cap crude price increases at the end of last week, prices decreased earlier in the week after the Consumer Price Index showed that inflation remains stronger than expected. As a result, the market is concerned that the Federal Reserve could take more drastic measures that could lead to a recession, which would likely lead to a drop in crude demand and prices. For this week, persistent demand concerns could put downward pressure on prices. EIA’s latest weekly report also showed that total commercial crude inventories increased by 2.4 million bbl to 429.6 million bbl.
At the close of Friday’s formal trading session, WTI increased by a penny to settle at $85.11. At the close of Monday’s formal trading session, WTI gained 62 cents to close at $85.73. Today crude is trading around $83, compared to $87 a week ago. Crude prices are about $14 more than a year ago.
