PORTLAND, Ore., – Lower crude oil prices, declining demand for gasoline and falling wholesale gas prices are putting downward pressure on pump prices. For the week, the national average for regular drops four cents to $2.81 while Oregon’s average slips two cents to $3.36. Prices are lower week-over-week in every state except Hawaii.
This price drop is occurring at a time that analysts previously thought would likely see gas price increases due to the Trump administration’s re-imposition of sanctions on Iran which went into effect on Nov. 4. When the decision was announced last May, markets reacted quickly with crude oil prices spiking as high as $77/bbl this summer. At the same time, Iran’s exports began to dip. Today, they are reported to be about one million b/d less than in May while crude oil prices have stayed below $70/bbl for two weeks.
“If crude oil prices remain fairly steady or move even lower, gas prices should also fall and could plunge as much as 10 cents in the next couple weeks. However, a number of other factors could send oil prices up again which would cause an upward shift in pump prices,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
Oregon is one of 49 states and the District of Colombia where prices have decreased week-over-week. Ohio has the largest weekly decrease (-12 cents). Hawaii (+1/2 cent) is the only state with a weekly increase. This week eight states have averages at or above $3 a gallon, same as last week.
Oregon is one of five states where prices are higher now than a month ago. The national average is 16 cents less and the Oregon average is four cents more than a month ago. Ohio has the largest monthly decrease (-35 cents). Hawaii has the largest monthly increase (+8 cents). Hawaii, Washington, Oregon, Alaska and Nevada are the only states with monthly increases due to a natural gas pipeline rupture in British Columbia, Canada a month ago. This forced three Puget Sound refineries to shut production units. Gas prices on the West Coast spiked due to the reduced output.
The West Coast continues to have the most expensive gas prices in the nation. Hawaii tops the list for the 22nd week in a row with California, Washington, Alaska, Oregon, Nevada and Idaho rounding out the top seven. Oregon is fifth for the third week in a row. On the week, prices in every state in the region are lower except Hawaii.
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The U.S. Energy Information Administration’s weekly petroleum status report for the week ending on October 26, shows West Coast gasoline stocks remained flat at 27 million bbl. Stocks are approximately 600,000 bbl lower than at this time last year, which could cause prices to spike if there is a supply challenge in the region this week.
The nation’s cheapest markets are Delaware ($2.42) and Missouri ($2.45). For the 66th week in a row, no states have an average below $2.
Drivers in 45 states and the District of Columbia are paying more than a year ago to fill up. The national average is 22 cents more and the Oregon average is 55 cents more than a year ago. This is the fourth-largest yearly increase in the country. Hawaii (+75 cents) has the greatest year-over-year increase; Washington (+56 cents) is second; Nevada (+55 cents) is third; and California (+54 cents) is fifth.
Oil Market Dynamics
Reports of rising supplies have pushed crude oil prices lower. Total domestic crude inventories grew by 3.2 million bbl last week, according to the EIA’s latest weekly petroleum status report. Stocks now sit at 426 million bbl, which is 28.9 million bbl lower than the level seen at this time last year, but the highest level since mid-June. Steady growth, for the sixth consecutive week, in crude inventories has helped to check excessive increases in crude prices.
In addition, re-imposed sanctions on Iran’s crude exports have not ignited fears in the market about constrained global supply this winter, since the U.S. will reportedly issue eight waivers that allow some of Iran’s top export destinations to continue importing its oil. Oil prices could remain flat or continue falling this week due to reduced concerns about a global crude supply shortage as a result of the sanctions.
At the close of Friday’s formal trading session on the NYMEX, WTI dropped 55 cents to settle at $63.14. At the close of Monday’s formal trading session on the NYMEX, WTI lost four cents to settle at $63.10. Today crude is trading around $62, compared to $67 a week ago. Crude prices are down about 17 percent in the last month and are about $7 more per barrel 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 a penny to $3.27 a gallon. Oregon’s average dips half a cent to $3.45. A year ago the national average for diesel was $2.79 and the Oregon average was $2.94.