Gas Prices continue to drop ahead of Thanksgiving
PORTLAND, Ore., – Drivers are thankful for lower pump prices as Thanksgiving approaches. Gas prices continue to decline as millions of Americans hit the road for the long holiday weekend. Here in Oregon, drivers will pay about 40 cents a gallon less than last Thanksgiving. For the week, the national average for regular dips six cents to $3.30 a gallon. The Oregon average loses nine cents to $4.11.
“Pump prices should continue to decline in most markets through the Thanksgiving holiday weekend. Many gas stations in Oregon are already selling regular for less than $4 a gallon and more will join soon,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
AAA projects 55.4 million Americans including 785,000 Oregonians will travel for the holiday, up 2.3% from 2022. This year is expected to be the third-busiest for Thanksgiving travel since AAA started tracking in 2000, only behind 2005 and 2019. Most will drive to their Thanksgiving destinations. Find all the details in the AAA Thanksgiving travel news release.
The national average for regular has been steadily falling since reaching its year-to-date high of $3.88 on September 18. The Oregon average has been moving lower since reaching its year-to-date high of $4.77 on August 30.
Several Oregon markets now have averages below $4 a gallon including:
Hood River $3.97
Lincoln City $3.68
Thirteen Oregon counties have averages below $4 a gallon:
Hood River $3.89
Crude oil prices have been volatile since the start of the conflict between Israel and Hamas last month. Fears that the conflict could escalate across the Middle East sent crude oil prices near $90 per barrel in October. Crude prices fell into the $70s on November 7 and have remained there since then. While Israel and the Palestinian territory are not oil producers, there’ve been concerns that the conflict could spread in the Middle East, which could 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. Crude prices also surge on news of production cuts by major oil producers. Crude oil prices spiked 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.
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.
Crude oil is trading around $77 today compared to $78 a week ago and $80 a year ago. So far this year, West Texas Intermediate has ranged between $63 and $94 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 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 gas in the U.S. has decreased from 9.49 to 8.95 million b/d for the week ending November 10, according to the U.S. Energy Information Administration (EIA). The EIA’s estimate for demand is unusually high for early November, but when the EIA releases monthly demand data in a few weeks, it could revise it lower. Meanwhile, total domestic gasoline stocks decreased by 1.5 million bbl to 215.7 million bbl.
Lower gas demand, alongside declining oil prices, has contributed to pushing pump prices down. If gas demand and the cost of oil remain low, drivers can expect further pump price drops ahead of Thanksgiving.
Oregon is one of 46 states and the District of Columbia with lower prices now than a week ago. Utah (-17 cents has the biggest weekly drop. Hawaii (-1 cent) has the smallest weekly decline. Delaware (+20 cents) has the largest week-over-week increase.
California ($4.96) has the most expensive gas in the nation for the 17th week in a row but falls below $5 for the first time since July. Hawaii ($4.73) is second, Washington ($4.43) is third, Nevada ($4.25) is fourth, Oregon ($4.11) is fifth, and Alaska ($4.02) is sixth. These are the six states with averages at or above $4, same as last week. This week 32 states and the District of Columbia have averages in the $3-range. Twelve states have averages in the $2 range this week.
The cheapest gas in the nation is in Texas ($2.77) and Mississippi ($2.78). 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 $2.19 this week, compared to $2.27 a week ago.
All 50 states and the District of Columbia have lower prices now than a month ago. The national average is 26 cents less and the Oregon average is 36 cents less than a month ago. Arizona (-60 cents) has the largest monthly drop. Delaware (-2 cents) has the smallest.
All 50 states and the District of Columbia have lower prices now than a year ago. The national average is 37 cents less and the Oregon average is 53 cents less than a year ago. This is the eighth-largest yearly drop in the nation. Utah (-65 cents) has the largest yearly decrease. Texas (-23 cents has the smallest yearly decline.
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.
|Rank||Region||Price on 11/21/23|
As mentioned above, California has the most expensive gas in the country. Hawaii, Washington, Nevada, Oregon, and Alaska round out the top six. Arizona is eighth. Oregon is fifth most expensive for the fifth week in a row.
Like almost every other state in the nation, all states in the West Coast region are seeing week-over-week declines. Arizona (-13 cents) and Nevada (-13 cents) have the largest weekly drops in the region. California (-10 cents), Oregon (-9 cents), Washington (-7 cents), Alaska (-6 cents), and Hawaii (-1 cent) are also seeing weekly declines.
The refinery utilization rate on the West Coast climbed from 81.0% to 82.8% for the week ending November 10. This rate has ranged between about 73% to 96% in the last year. The latest national refinery utilization rate rose from 85.2% to 86.1%.
According to EIA’s latest weekly report, total gas stocks in the region fell from 28.13 million bbl. to 28.62 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 fell again last week due to reduced market concerns that the conflict in the Middle East will escalate, which could lead to a reduction in regional oil production and higher prices. Prices rose to start this week on news that OPEC+ may announce additional production cuts at a meeting next week. Additionally, the EIA reported that total domestic commercial crude inventories increased by 3.6 million bbl to 439.4 million bbl last week.
At the close of Friday’s formal trading session, WTI gained $2.99 to settle at $75.89. At the close of Monday’s formal trading session, WTI added $1.71 to settle at $77.60. Today crude is trading around $77 compared to $78 a week ago. Crude prices are about $2 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 seven cents to $4.28 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average loses eight cents to $4.72. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $5.30 and the Oregon average was $5.51.
Find current fuel prices at GasPrices.AAA.com.
AAA news releases, high resolution images, broadcast-quality video, fact sheets and podcasts are available on the AAA NewsRoom at NewsRoom.AAA.com.
Find local news releases at https://oregon.aaa.com/community/media/media-contacts.html
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.