The recent run of half to four cents per day has slowed, but rising global crude prices and increased demand for gas in the United States have still pushed prices at the pump higher. For the week, the national average for regular unleaded adds six cents to $3.51. The Oregon average also gains six cents to $3.78.
“January weather was relatively mild here in Oregon and in much of the country, which resulted in more motorists hitting the road. However, a return of colder, wintry weather this week could mean a return to more seasonal driving patterns. This will likely lead to a reduction in gas demand. But with the cost of oil remaining between $78 and $80 a barrel, drivers likely won’t see relief at the pumps in the next couple of weeks,” says Marie Dodds, director of public affairs for AAA Oregon/Idaho.
Crude oil is trading around $79 a barrel today. This month, West Texas Intermediate has fluctuated between about $73 and $82 bbl. and it was $88 a year ago. Crude reached recent highs of $123.70 on March 8, 2022 and $122.11 a barrel on June 8, 2022. The all-time high for WTI crude oil was $147.27 in July 2008.
Crude oil prices tend to rise in response to positive economic news as countries with growing economies tend to consume more oil than countries with shrinking economies. Crude oil prices also rise when geopolitical events have the potential to disrupt supply.
Crude oil prices soared before and in the first few months of Russia’s invasion of Ukraine. Russia is one of the world’s largest oil producers and its involvement in war causes market volatility, and the sanctions imposed on Russia by the United States and other Western nations have led to a tighter global oil supply. Oil inventories were already tight around the world as demand for oil increased as pandemic-related restrictions eased.
Crude oil is the main ingredient in gasoline and diesel, so prices at the pump are influenced by crude oil prices in global markets. On average, about 56% of what we pay in a gallon of gasoline is for the price of crude oil, 20% is refining, 11% is distribution and marketing, and 14% is taxes, according to the US Energy Information Administration .
US gasoline demand increased slightly from 8.05 to 8.14 million barrels per day last week. This compares with 8.51 million b/d year ago. Meanwhile, total national inventories of gasoline increased by 1.7 million bbl to 232 million bbl. Increased demand for gas and rising oil prices have contributed to rising prices at the pump.
Oregon is one of 46 states and the District of Columbia with the highest prices week after week. Colorado (+17 cents) has the largest weekly jump, followed by Kansas (+11 cents) and California (+11 cents). Indiana (-3 cents) and Hawaii (-1 cent) have the largest weekly declines.
Hawaii ($4.94) is the state with the most expensive gas in the nation for the tenth consecutive week. California ($4.56) is second and Washington ($4.13) is third. These are the only three states with averages at or above $4 a gallon. This week 47 states and the District of Columbia are averaging $3. No state has averages below $3 a gallon.
The cheapest gas in the nation is in Texas ($3.13) and Mississippi ($3.17). For the 107th consecutive week, no state is averaging below $2 a gallon.
The difference between the most expensive and least expensive states is $1.81 this week versus $1.88 last week, so the gap continues to narrow.
Oregon is one of 49 states and the District of Columbia with higher prices now than they were a month ago. The national average is 31 cents higher and the Oregon average is four cents higher than it was a month ago. Oregon has the third smallest monthly increase in the nation. Colorado (+97 cents) and Georgia (+63 cents) have the biggest monthly earners. Hawaii (-9 cents) is the only state with monthly decline.
Oregon is one of only six states with prices lower than a year ago. The national average is 14 cents higher and the Oregon average is 14 cents lower than it was a year ago. This is the fourth largest annual decline in the nation. Connecticut (-15 cents) has the largest year-over-year decline. Colorado (+56 cents) and Hawaii (+55 cents) post the biggest jumps year-over-year.
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. This is typical of the West Coast as this region tends to consistently have fairly low supplies, consuming about the same amount of gasoline it is produced. Also, this region is located relatively far from the parts of the country where oil drilling, production and refining takes place, so transportation costs are higher. And the environmental programs in this region add to the costs of production, storage and distribution.
For the week, the national average for diesel adds four cents to $4.68 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average is up six cents to $4.79. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $3.72 and the Oregon average was $4.12.