Rising oil prices fuel C.O. gas price rise as new year begins
PORTLAND, Ore. (KTVZ) – Gas prices are ticking up on the High Desert and elsewhere in the first days of 2025. The major driver is a rally in crude oil prices, AAA Oregon/Idaho reported Tuesday.
Here's their weekly report:
While the national average for regular gas came close to $3 a gallon in late 2024, it did not fall below that threshold.
The Oregon average has been fairly steady for the last month, changing only by a few pennies. For the week, the national average for regular adds three cents to $3.07 a gallon. The Oregon average edges up one cent to $3.47 a gallon.
“Crude oil prices have soared to their highest prices in nearly three months as parts of the U.S. are being blasted by winter weather, boosting energy prices, and also because of optimism that China’s economy would improve due to fiscal stimulus programs,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
“The higher crude oil prices are putting upward pressure on pump prices. It’s likely we’ll see pump prices rise in fits and starts over the next few weeks, before the normal seasonal increases that come a bit later in the year. For now, though, drivers continue to enjoy gas prices that are near their seasonal lows.”
The average price of regular gas in Oregon in 2024 is $3.88, compared to $4.23 in 2023. The Oregon average began 2024 at $3.79 a gallon and ended the year at $3.45. The lowest price in 2024 was just under $3.45 a gallon on December 30 and the highest price of the year was nearly $4.51 on May 1.
The average price of gas nationwide in 2024 is $3.33, compared to $3.53 in 2023. The national average started 2024 at $3.11 and ended the year at $3.04. The lowest price in 2024 was $3.01 on December 10, and the highest was just under $3.68 on April 19.
Gas prices typically rise starting in mid-to-late winter and early spring as refineries undergo maintenance ahead of the switch to summer-blend fuel. The switch occurs first in California, which is why pump prices on the West Coast often rise before other parts of the country.
The East Coast is the last major market to switch to summer-blend fuel. Most areas have a May 1 compliance date for refiners and terminals, while most gas stations have a June 1 deadline to switch to selling summer-blend until June 1. Switch-over dates are earlier in California, with some areas in the state requiring summer-blend fuel by April 1. Some refineries will begin maintenance and the switchover in February.
Gas prices usually drop in the fall, due to the switch from summer-blend to winter-blend fuel, which costs less to produce. The switch starts in September. Many areas, including Oregon, can sell winter-blend fuel starting September 15. However, Northern and Southern California require summer-blend fuel through October 31. Prices usually decline to their lowest levels of the year in late fall and early winter before increasing again in the late winter and early spring.
Meanwhile, crude oil production in the U.S. remains near record highs. The U.S. Energy Information Administration (EIA) reports that crude production in this country slipped from 13.58 to 13.57 million barrels per day for the week ending December 27. The record high is 13.63 million barrels per day for the week of December 6. Production has been at 13.5 million barrels per day several times since October. The U.S. has been the top producer of crude oil in the world since 2018 and has been increasing its oil production since about 2009.
The U.S. price of crude oil (West Texas Intermediate) has been between about $67 and $74 per barrel since mid-October. Crude prices increased to just under $74 last week as investors were optimistic about an improving economy in China, which is the world’s largest consumer of oil. In addition, wintery weather in much of the U.S. has created increased energy demands.
Crude prices are impacted by economic news as well as geopolitical events around the world including the unrest in the Middle East and the war between Russia and Ukraine. In addition, production cuts by OPEC+ have tightened global crude oil supplies, which will continue to impact prices.
The price of crude oil reached the year-to-date high in 2024 of nearly $87 per barrel on April 5. Major drivers of elevated crude prices have been the unrest in the Middle East, the decision by OPEC+ to keep oil production cuts in place, and war between Russia and Ukraine. Russia is a top global oil producer, behind the U.S. and Saudi Arabia.
Crude prices have been volatile after the attack on Israel by Hamas in October 2023. While Israel and the Palestinian territory are not oil producers, concerns remain 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 $72 a week ago and $71 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 55% of what we pay for in a gallon of gasoline is for the price of crude oil, 11% is refining, 18% distribution and marketing, and 16% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline in the U.S. fell from 9.01 million b/d to 8.17 million b/d for the week ending December 27, according to the U.S. Energy Information Administration (EIA). This compares to 7.95 million b/d a year ago. Meanwhile, total domestic gasoline stocks rose from 223.7 million barrels to 231.4, while gasoline production decreased last week, averaging 8.9 million barrels daily compared to 9.9 million barrels a day the previous week.
Pump prices will likely climb a bit ahead of the larger seasonal increases that we usually see in the coming weeks, especially if crude oil prices remain close to $74 per barrel.
Quick stats
Oregon is one of 32 states with higher prices now than a week ago. Delaware (+26 cents) has the largest week-over-week increase in the nation. Colorado (-2 cents) has the biggest week-over-week decrease. The average in Indiana is flat.
Hawaii ($4.54) has the most expensive gas in the nation for the 10th week in a row. California ($4.38) is second. These are the only two states in the country with averages still at or above $4 a gallon. This week 20 states and the District of Columbia have averages in the $3-range. There are 28 states with an average in the $2 range this week.
The cheapest gas in the nation is in Oklahoma ($2.56) and Mississippi ($2.62). No state has had an average below $2 a gallon since January 7, 2021, when Mississippi and Texas were below that threshold. At the time, the COVID-19 pandemic drove significant declines in crude oil and gasoline demand in the U.S. and around the world.
The difference between the most expensive and least expensive states is $1.98 this week, compared to $1.97 a week ago.
Oregon is one of 18 states with lower prices now than a month ago. The national average is five cents more and the Oregon average is four cents less than a month ago. Ohio (+23 cents) has the largest month-over-month increase. Alaska (-14 cents) has the largest month-over-month drop in the nation. The average in Mississippi is flat.
Oregon is one of 31 states with lower prices now than a year ago. The national average is one cent less and the Oregon average is 28 cents less than a year ago. This is the fourth-largest year-over-year drop in the nation. Alaska (-32 cents) has the largest yearly drop. Ohio (+44 cents) has the largest 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.
| Rank | Region | Price on 1/7/2025 |
| 1 | Hawaii | $4.54 |
| 2 | California | $4.38 |
| 3 | Washington | $3.91 |
| 4 | Nevada | $3.61 |
| 5 | Oregon | $3.47 |
| 6 | Alaska | $3.30 |
| 7 | Pennsylvania | $3.27 |
| 8 | Illinois | $3.24 |
| 9 | District of Columbia | $3.23 |
| 10 | Maryland | $3.14 |
As mentioned above, Hawaii has the most expensive gas in the country for the 10th week in a row. California, Washington, Nevada, Oregon, and Alaska round out the top six. Arizona is 20th. Oregon is fifth for the 14th week in a row.
All seven states in the West Coast region are seeing minimal changes in gas prices on the week: California (+3 cents), Oregon (+1 cent), and Washington (+1 cent) have small increases. Alaska (-2 cents), Arizona (-2 cents), Hawaii (-1 cent), and Nevada (-1/10th of a cent) all have small week-over-week declines.
The refinery utilization rate on the West Coast fell from 87.3% to 83.3% for the week ending December 27. This rate has ranged between about 75% to 92% in the last year. The latest national refinery utilization rate ticked up from 92.5% to 92.7%. The refinery utilization rate measures how much crude oil refineries are processing as a percentage of their maximum capacity. A low or declining rate can put upward pressure on pump prices, while a high or rising rate can put downward pressure on pump prices.
According to EIA’s latest weekly report, total gas stocks in the region rose from 28.22 million bbl. to 28.83 million bbl.
A decrease in the refinery utilization rate and/or a low rate can put upward pressure on pump prices, and an increase in gasoline stocks can put downward pressure on pump prices.
Oil market dynamics
Crude oil prices remain near three-month highs as investors weighed potentially positive economic news out of China, which would lead to greater demand of oil, and increased demand for energy in the U.S. as winter storms batter parts of the country. Crude prices eased yesterday due to some lackluster economic news out of Germany and news that new orders for manufactured goods fell in U.S. in November. But crude prices rose again today. Meanwhile, the EIA reports that crude oil inventories decreased by 1.2 million barrels from the previous week. At 415.6 million barrels, U.S. crude oil inventories are about 5% below the five-year average for this time of year.
At the close of Friday’s formal trading session, WTI added $1.27 to settle at $73.96. At the close of Monday’s formal trading session, WTI fell 39 cents to settle at $73.57. Today crude is trading around $74 compared to $72 a week ago. Crude prices are about $3 more than a year ago. ($70.77 on Jan. 8, 2024)
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.
Diesel
For the week, the national average gains two cents to $3.53 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average adds two cents to $3.77. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $3.96 and the Oregon average was $4.31.
Find current fuel prices at GasPrices.AAA.com.
