PORTLAND, Ore., – Gas prices are falling in Oregon and across the U.S., despite the conflict in the Middle East between Israel and Hamas. Crude oil prices have risen since the attack on Israel by Hamas earlier this month, but the surge isn’t as large as the spike in 2022 after Russia invaded Ukraine. For the week, the national average falls 10 cents to $3.58. The Oregon average loses 11 cents to $4.52.
The national average is at its lowest price since July. The Oregon average is at its lowest price since June.
“Gas prices should continue to decline, but the conflict in the Middle East could temper the decreases at the pumps,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “While Israel and the Palestinian territory are not major oil producers, there are concerns that the conflict could spread in the region, which could impact oil production.”
Crude oil 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 has 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, 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 $85 today compared to $86 a week ago and $85 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 increased from 8.01 to 8.58 million b/d for the week ending October 6, according to the U.S. Energy Information Administration (EIA). This compares to 8.28 million b/d a year ago. Meanwhile, total domestic gasoline stocks fell by 1.3 million bbl to 225.7 million bbl.
Tepid demand, alongside descending oil prices, has pushed pump prices lower. If oil prices continue to decline, drivers can expect further price drops at the pump in the weeks ahead.
All 50 states have lower prices now than a week ago with 13 states, including Oregon, seeing double-digit drops. California (-18 cents) and Arizona (-16 cents) have the biggest weekly declines. The District of Columbia (-3 cents) has the smallest.
California ($5.59) has the most expensive gas in the nation for the 12th week in a row and is the only state with an average at or above $5 a gallon. Washington ($4.88) is second and falls below $5 this week. Hawaii ($4.79) is third, Nevada ($4.77) is fourth, Alaska ($4.53) is fifth, Oregon ($4.52) is sixth, Arizona ($4.31) is seventh. These are the seven states with averages at or above $4. Last week, there were nine states with averages at or above $4 a gallon. This week 43 states and the District of Columbia have averages in the $3-range. No state has an average in the $2 range this week.
The cheapest gas in the nation is in Texas ($3.05) and Georgia ($3.05). For the 144th week in a row, no state has an average below $2 a gallon.
The difference between the most expensive and least expensive states is $2.54 this week, compared to $2.63 a week ago.
All 50 states and the District of Columbia have lower prices now than a month ago. The national average is 29 cents less and the Oregon average is 18 cents less than a month ago. Delaware (-62 cents) has the largest monthly drop. Hawaii (-1 cent) has the smallest.
Oregon is one of 45 states and the District of Columbia with lower prices now than a year ago. The national average is 30 cents less and the Oregon average is 83 cents less than a year ago. This is the second-largest yearly drop in the nation. Alaska (-89 cents) has the largest yearly decrease. Connecticut (+18 cents) has the largest 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.
|Rank||Region||Price on 10/17/23|
As mentioned above, California has the most expensive gas in the country. Washington, Hawaii, Nevada, Alaska, Oregon, and Arizona round out the top seven. Oregon slips to sixth most expensive after four weeks at fifth.
Like the rest of the country, all states in the West Coast region are seeing week-over-week declines. California (-18 cents) and Arizona (-16 cents) have the largest weekly drops in the region and the nation. Nevada (-12 cents), Washington (-12 cents), Oregon (-11 cents), Alaska (-6 cents), and Hawaii (-6 cents) are also seeing weekly declines.
The refinery utilization rate on the West Coast fell from 92.6% to 85.9% for the week ending October 6. This rate has ranged between about 73% to 96% in the last year. The latest national refinery utilization rate decreased from 87.3% to 85.7%
According to EIA’s latest weekly report, total gas stocks in the region rose slightly from 29.34 million bbl. to 29.49 million bbl.
A lower refinery utilization rate and 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. Prices rose sharply shortly after the attack but have not maintained the higher prices due to demand concerns and the potential for a recession. If the U.S. and other global economies slow, oil prices, and demand would likely decline. Additionally, the EIA reported that total commercial crude stocks increased significantly by 10.1 million bbl to 424.2 million bbl last week.
At the close of Friday’s formal trading session, WTI jumped $4.78 to settle at $87.69. At the close of Monday’s formal trading session, WTI fell $1.03 to settle at $86.66. Today crude is trading around $85 compared to $86 a week ago. Crude prices are about $1 more 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 loses five cents to $4.46 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average falls six cents to $5.04. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $5.28 and the Oregon average was $5.72.
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.