PORTLAND, Ore., – Crude oil prices have fallen again after spiking in response to Iran’s attack on Israel, and that’s helping gas prices settle down. Most states, including Oregon, are seeing pump prices change by less than a nickel on the week. Meanwhile, numerous gas stations in Florida remain out of gas following Hurricane Milton but deliveries are being made. Power outages are also impacting gas availability there. However, the storm did not have a major impact on pump prices. For the week, the national average for regular ticks up two cents to $3.20 a gallon. The Oregon average holds steady at $3.68 a gallon.
The U.S. price of crude oil (West Texas Intermediate) has tumbled today to $70 per barrel after Israel told the U.S. that it would not strike Iran’s oil facilities and would instead target military sites. This has eased concerns of an oil production disruption in the Middle East.
“Now that the rally in crude oil prices has eased, pump prices should resume their declines in the coming weeks, depending on what happens in the Middle East. More unrest could send crude oil prices higher again, which, in turn, puts upward pressure on pump prices,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
The Oregon average began 2024 at $3.79 a gallon compared to $3.68 today. Its lowest price so far this year is $3.58 on February 14 and the highest is nearly $4.51 on May 1. The national average started the year at $3.11 and is at $3.20 today. Its lowest price so far this year is just under $3.07 on January 15 and the highest is just under $3.68 on April 19.
This week, only one Oregon county still has an average above $4 a gallon: Wallowa ($4.10), same as a week ago.
Gas prices typically drop in the fall, due to the switch from summer-blend to winter-blend fuel, which costs less to produce. The switch starts in September. Many areas, including Oregon, can sell winter-blend fuel starting September 15. However, Northern and Southern California require summer-blend fuel through October 31.
Crude prices are impacted by economic news as well as geopolitical events around the world including the unrest in the Middle East and the war between Russia and Ukraine. In addition, production cuts by OPEC+ have tightened global crude oil supplies, which will continue to impact prices. Hurricane season can also impact crude oil prices, if a major storm impacts infrastructure in the Gulf of Mexico. Hurricane season runs from June 1 to November 30.
The price of crude oil reached the year-to-date high of nearly $87 per barrel on April 5. Major drivers of elevated crude prices have been the unrest in the Middle East, the decision by OPEC+ to keep oil production cuts in place, and Ukrainian attacks on Russian refineries. Russia is a top global oil producer, behind the U.S. and Saudi Arabia, and the refinery attacks have reduced output. Crude prices have been volatile after the attack on Israel by Hamas in October 2023. While Israel and the Palestinian territory are not oil producers, concerns remain that the conflict could spread in the Middle East, which could potentially impact crude production in other oil-producing nations in the region.
Crude oil is trading around $70 today compared to $74 a week ago and $87 a year ago. In 2023, West Texas Intermediate ranged between $63 and $95 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 55% of what we pay for in a gallon of gasoline is for the price of crude oil, 13% is refining, 17% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline in the U.S. surged from 8.52 million b/d to 9.65 million b/d for the week ending October 4, according to the U.S. Energy Information Administration (EIA). This compares to 8.58 million b/d a year ago. Meanwhile, total domestic gasoline stocks plunged from 221.2 million barrels to 214.9, while gasoline production increased last week, averaging 10.2 million barrels daily compared to 9.6 million barrels the previous week.
Crude oil production in the U.S. is at 13.4 million barrels per day, according to the EIA. This remains at the record high of 13.4 million barrels per day last reached in August of this year. The U.S. produces more crude oil than any other country, according to the EIA.
If crude oil prices don’t rally again, gas prices should fall. Other factors putting downward pressure on prices include tepid gasoline demand and cheaper winter-blend fuel.
Quick stats
Oregon is one of 42 states and the District of Columbia where prices have changed by a nickel or less on the week. Indiana (+12 cents) has the biggest week-over-week increase in the nation. New Mexico (-7 cents) has the largest weekly decrease.
California ($4.68) has the most expensive gas in the nation for the sixth week in a row. Hawaii ($4.59) is second, and Washington ($4.07) is third. These are the three states with averages at or above $4 a gallon, same as a week ago. This week 30 states and the District of Columbia have averages in the $3-range. There are 17 states with an average in the $2 range this week.
The cheapest gas in the nation is in Georgia ($2.71) and Mississippi ($2.75). 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 $1.96 this week, compared to $1.98 a week ago.
Oregon is one of 32 states and the District of Columbia with lower prices now than a month ago. The national average is about half a cent less and the Oregon average is eight cents less than a month ago. Georgia (-26 cents) has the largest month-over-month drop in the nation. Delaware (+20 cents) has the largest monthly increase in the nation.
Oregon is one of 49 states and the District of Columbia with lower prices now than a year ago. The national average is 40 cents less and the Oregon average is 86 cents less than a year ago. This is the fifth-largest year-over-year drop in the nation. Arizona (-98 cents) has the largest year-over-year drop. Delaware (+12 cents) is the only state with a year-over-year increase.
West Coast
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. 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.
As mentioned above, California ($4.68) has the most expensive gas in the country. Hawaii, Washington, Nevada, Oregon, and Alaska round out the top six. Arizona ($3.35) is 11th. Oregon is fifth for the ninth week in a row.
All seven states in the West Coast region are seeing small or no changes in gas prices on the week. Alaska (-3 cents) and Nevada (-1 cent) have small decreases. Washington (+3 cents), Arizona (+2 cents), and Hawaii (+1/2 cent) have small increases. The averages in California and Oregon are flat week-over-week.
The refinery utilization rate on the West Coast slipped from 89.2% to 85.0% for the week ending October 4. This rate has ranged between about 74% to % in the last year. The latest national refinery utilization rate dipped from 87.6% to 86.7%. The refinery utilization rate measures how much crude oil refineries are processing as a percentage of their maximum capacity. A low or declining rate can put upward pressure on pump prices, while a high or rising rate can put downward pressure on pump prices.
According to EIA’s latest weekly report, total gas stocks in the region fell from 27.30 million bbl. to 26.80 million bbl.
An decrease in the refinery utilization rate and/or a low rate can put upward pressure on pump prices, and a decrease in gasoline stocks can put upward pressure on pump prices.
Oil market dynamics
The rally in crude oil prices (West Texas Intermediate) has eased after Israel said it would not strike Iran’s oil infrastructure in retaliation for Iran’s missile attack on Israel two weeks ago. WTI soared above $77 per barrel early last week on fears of a widening conflict in the Middle East. This week, those fears have eased after Israel said it would target military facilities in Iran. Today, WTI has backed off to around $70 per barrel. Meanwhile, the EIA reports that crude oil inventories increased by 3.9 million barrels from the previous week. At 416.9 million barrels, U.S. crude oil inventories are about 4% below the five-year average for this time of year.
At the close of Friday’s formal trading session, WTI slipped 29 cents to settle at $75.56. At the close of Monday’s formal trading session, WTI fell $1.73 to settle at $73.83. Today crude is trading around $70 compared to $74 a week ago. Crude prices are about $17 less 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.
Diesel
For the week, the national average adds two cents to $3.61 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average climbs three cents to $3.94. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $4.46 and the Oregon average was $5.05.
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 900,000 members with travel, insurance, financial and automotive-related services, and is an affiliate of AAA National, serving more than 64 million motorists in North America.