It appears that drivers are taking advantage of the warmer winter weather across much of the country by fueling up and driving more. Rising demand for gasoline and more expensive crude oil have pushed prices up at the pump. For the week, the national average for regular unleaded gasoline climbs 12 cents to $3.44. The Oregon average adds four cents to $3.72. This is the fifth smallest weekly earnings for a state in the nation.
“Relatively mild winter weather and crude oil prices rising above $80 a barrel have put upward pressure on pump prices for now. If demand remains strong, we are likely to see continued price increases at the pump throughout the week,” says Marie Dodds, director of public affairs for AAA Oregon/Idaho.
Today, crude oil trades at around $80 a barrel. This month, West Texas Intermediate has fluctuated between about $73 and $82 bbl. and it was $83 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 soared before and in the first few months of Russia’s invasion of Ukraine. Russia is one of the major oil producers in the world and its involvement in a war causes market volatility and the sanctions imposed on Russia by the United States and other Western nations have led to a reduction in global oil supplies. 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 jumped from 7.56 million barrels per day to 8.05 million barrels per day last week. This compares with 8.22 million b/d year ago. Meanwhile, total national inventories of gasoline increased by 3.5 million bbl to 230.3 million bbl. for the week ending January 13. If demand remains strong, pump prices are likely to continue to rise this week.
Oregon is one of 48 states and the District of Columbia with higher prices by the week. Colorado (+27 cents) had the largest weekly jump, followed by Tennessee (+21 cents) and Georgia (+20 cents). Hawaii (-4 cents) and Indiana (-4 cents) are the only two states with weekly declines.
Hawaii ($4.95) is the state with the most expensive gas in the nation for the ninth consecutive week. California ($4.45) is second and Washington $4.07 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 ($3.07) and Kansas ($3.10). For the 106th consecutive week, no state is averaging below $2 a gallon.
The difference between the most expensive and least expensive states is $1.88 this week versus $2.06 last week, so the gap is narrowing.
Oregon is one of only four states with prices lower than a month ago. The national average is 35 cents higher and the Oregon average is five cents lower than it was a month ago. Oregon has the third largest monthly decline in the nation. Hawaii (-11 cents) and Idaho (-7 cents) have the biggest monthly declines. Colorado (+87 cents) and Georgia (+59 cents) have the biggest monthly earners.
Oregon is one of only seven states with lower prices than a year ago. The national average is 12 cents higher and the Oregon average is 20 cents lower than it was a year ago. This is the second largest annual decline in the nation. Montana (-21 cents) has the largest year-over-year decline. Hawaii (+60 cents) and Ohio (+42 cents) posted 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 as product. 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 $4.64 a gallon. The record high is $5.816 set on June 19th. The Oregon average adds half a cent to $4.73. The record high is $6.47 set on July 3. A year ago the national average for diesel was $3.67 and the Oregon average was $4.09.