PORTLAND, Ore., – Drivers are getting a Halloween treat as gas prices decrease in all 50 states this week. However, the conflict in the Middle East is preventing significant drops in pump prices because of volatile crude oil prices. For the week, the national average loses seven cents to $3.48. The Oregon average tumbles 10 cents to $4.34. Oregon has the ninth-largest weekly decline for a state in the nation.
The national average is at its lowest price since March. The Oregon average is at its lowest price since June.
“Crude oil prices have been volatile since the start of the conflict between Israel and Hamas. Fears that the conflict could escalate across the Middle East sent crude oil prices near $90 per barrel earlier this month. This week, crude prices are back in the low- to mid-$80 range. Expect continued volatility in crude oil prices which will continue to temper decreases in pump prices,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “The conflict will continue to impact crude oil prices. While Israel and the Palestinian territory are not oil producers, concerns remain that the conflict has the potential to impact crude production in other oil-producing nations in the region.”
Crude oil prices tend to rise when there are geo-political events involving oil producers. Crude prices spiked after the invasion of Ukraine by Russia last year because Russia is one of the world’s top oil producers, behind the U.S. and Saudi Arabia.
Gas prices normally decline in the fall, in part due to a drop in demand for gasoline compared to the summer months and the switch from summer-blend gas to winter-blend gas. Winter-blend gas is cheaper to produce than summer-blend fuel as it contains ingredients such as butane, so gas prices normally fall when the switch occurs. 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. The switch occurs on September 15 except California, which normally keeps summer-blend gasoline until October 31. This year, California allowed the switch to occur earlier because of refinery issues in that state that sent pump prices soaring on the West Coast in late September.
After the horrific attack on Israel by Hamas on October 7, crude oil prices increased by a few dollars but did not climb above $90. Crude oil prices surged above $90 per barrel in mid-September, the highest price since last November, in response to the announcement from Saudi Arabia and Russia that they would keep their production cuts in place through 2023. The cuts are one million barrels a day by Saudi Arabia and 300,000 barrels a day by Russia.
Crude oil is trading around $82 today compared to $84 a week ago and $87 a year ago. In September, West Coast Intermediate ranged between about $85 and $94 per barrel. In August, WTI ranged between about $77 and $85 per barrel. In July, West Texas Intermediate ranged between about $69 and $82 per barrel. In June, WTI ranged between about $67 and $73 per barrel. In May, WTI ranged between about $63 and $77 per barrel. In April, WTI ranged between about $73 and $83. In March, WTI ranged between about $64 and $81 per barrel. In February, WTI ranged between about $73 and $80 per barrel. In January, WTI ranged between about $73 and $82 bbl. 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 50% of what we pay for in a gallon of gasoline is for the price of crude oil, 25% is refining, 11% distribution and marketing, and 14% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline decreased from 8.94 to 8.86 million b/d for the week ending October 20, according to the U.S. Energy Information Administration (EIA). This compares to 8.93 million b/d a year ago. Meanwhile, total domestic gasoline stocks increased slightly to 223.5 million bbl.
Lower gas demand, alongside declining oil prices, has contributed to pushing pump prices down. If oil prices continue to descend, drivers can expect further price drops at the pump in the weeks ahead.
All 50 states and the District of Columbia have lower prices now than a week ago. Arizona (-18 cents and California (-15 cents) have the biggest weekly drops. Hawaii (-1 cent) has the smallest weekly decline.
California ($5.27) has the most expensive gas in the nation for the 14th week in a row and is the only state with an average at or above $5 a gallon. Hawaii ($4.76) is second, Washington ($4.68) is third, Nevada ($4.58) is fourth, Oregon ($4.34) is fifth, and Alaska ($4.26) is sixth. These are the six states with averages at or above $4. Last week, there were seven states with averages at or above $4 a gallon. This week 41 states and the District of Columbia have averages in the $3-range. Three states have averages in the $2 range this week.
The cheapest gas in the nation is in Georgia ($2.95), Texas ($2.96) and Mississippi ($2.96). It’s the first time since March that one or more states have had averages below $3 a gallon. 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 $2.31 this week, compared to $2.41 a week ago.
All 50 states and the District of Columbia have lower prices now than a month ago. The national average is 35 cents less and the Oregon average is 43 cents less than a month ago. Oregon has the sixth-largest monthly drop for a state in the nation. California (-81 cents) has the largest monthly drop. Hawaii (-12 cents) has the smallest.
Oregon is one of 49 states and the District of Columbia with lower prices now than a year ago. The national average is 28 cents less and the Oregon average is 63 cents less than a year ago. This is the second-largest yearly drop in the nation. Michigan (-66 cents) has the largest yearly decrease. Florida (-18 cents has the smallest yearly decline. Colorado (+9 cents) is the only state with a year-over-year increase.
The West Coast region continues to have the most expensive pump prices in the nation with all 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.
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As mentioned above, California has the most expensive gas in the country. Hawaii, Washington, Nevada, Oregon, Alaska, and Arizona round out the top seven. Oregon is fifth most expensive for the second week in a row.
Like the rest of the country, all states in the West Coast region are seeing week-over-week declines. Arizona (-18 cents) and California (-15 cents) have the largest weekly drops in the region and the nation. Nevada (-11 cents), Washington (-11 cents), Oregon (-10 cents), and Hawaii (-1 cent) are also seeing weekly declines.
The refinery utilization rate on the West Coast rose from 84.4% to 85.0% for the week ending October 20. This rate has ranged between about 73% to 96% in the last year. The latest national refinery utilization rate decreased from 86.1% to 85.6%.
According to EIA’s latest weekly report, total gas stocks in the region fell from 29.68 million bbl. to 28.69 million bbl.
A higher refinery utilization rate can put downward pressure on pump prices, while a decrease in gasoline stocks can put upward pressure on pump prices.
Oil market dynamics
Crude oil prices have been volatile since the attack on Israel by Hamas on October 7. Prices rose last week as Israel prepared for ground operations. Prices fell at the start of this week as concerns about a wider regional conflict eased. Market watchers are also focused on this week’s meeting of the Federal Reserve, which is expected to keep interest rates the same. Additionally, the EIA reported that total domestic commercial crude supply increased by 1.4 million bbl to 421.1 million bbl.
At the close of Friday’s formal trading session, WTI jumped $2.33 to settle at $85.54. At the close of Monday’s formal trading session, WTI fell $3.23 to settle at $82.31. Today crude is trading around $82 compared to $84 a week ago. Crude prices are about $5 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.
For the week, the national average falls five cents to $4.46 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average loses five cents to $4.93. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $5.31 and the Oregon average was $5.62.
Find current fuel prices at GasPrices.AAA.com.
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Fuel prices are updated daily at AAA’s Daily Fuel Gauge at AAA Gas Prices. For more info go www.AAA.com. AAA Oregon/Idaho provides more than 890,000 members with travel, insurance, financial and automotive-related services, and is an affiliate of AAA National, serving more than 63 million motorists in North America.