Gas Prices Sink below $2 in Three States

Oregon, National Averages at Lowest Price since February

PORTLAND, Ore., – “Drivers continue to enjoy plunging gas prices, and three southern states now post averages below $2 a gallon: South Carolina, Mississippi, and Alabama. This is the first time that three states have had averages below $2 since February. For the week, the national average drops seven cents to $2.32 while Oregon’s average tumbles a dime to $2.66. Both averages are at their lowest prices since February,” says AAA Oregon/Idaho Public Affairs Director Marie Dodds. “Pump prices are more than a dollar a gallon cheaper than a year ago due to the relatively low price of crude oil.”

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Barring any unexpected disruptions in supply or spikes in the price of crude oil, AAA expects retail gas prices to keep moving lower as long as refineries are able to conduct planned seasonal maintenance without issues.

Pump prices typically decline this time of year due to lower demand after the busy summer driving season and the changeover to cheaper winter-blend gasoline, which takes place in many parts of the country starting on September 16. The Environmental Protection Agency requires certain areas to use a specified blend of gasoline, commonly referred to as summer-blend gasoline, in order to address air quality issues during the summer. This more expensive summer-blend gasoline is not required during the winter months and retail prices tend to fall following this seasonal switchover.

The most expensive markets for retail gasoline continue to be found west of the Rockies, with drivers in Alaska ($3.26) continuing to pay the highest averages at the pump. Regional neighbors California ($3.15), Nevada ($3.05), Hawaii ($2.96), Idaho ($2.80), Washington ($2.78), Utah ($2.77), Wyoming ($2.69), Oregon ($2.66) and Colorado ($2.63) round out the top 10 most expensive markets. Oregon is ninth down from eighth last week. Averages are back below $2 a gallon in South Carolina ($1.93), Alabama ($1.98) and Mississippi ($1.98).

With just one exception, motorists in every state are experiencing savings week-over-week. Averages are down by a nickel or more in 30 states and Washington, D.C., and pump prices in Indiana (-14 cents), Illinois (-13 cents), California (-11 cents), Oregon (-10 cents) and Michigan (-10 cents) have dropped by double-digit increments. Ohio is the only state where prices have climbed higher by three cents per gallon versus one week ago.

With the exception of Utah (-2 cents), drivers across the nation are saving more than a dime per gallon at the pump month-over-month and prices are discounted by a quarter or more per gallon in more than half (26) of the states. Oregon’s average is 34 cents lower than a month ago.

Yearly discounts are even larger. The national average is $1.12 and Oregon’s average is $1.17 less than a year ago. Drivers in the majority of states (35) are saving at least $1 per gallon at the pump.

The global oil market remains volatile and the overall sentiment continues to swing between bulls and bears in response to recent reports. The International Energy Agency is predicting that production from non-OPEC countries will fall by its largest increment in 24 years, and the organization attributes this decrease to the success of OPEC’s strategy to protect its market share by sustaining production despite the relatively low price of crude oil. The IEA also expects global oil demand to increase in 2016. The combination of lower production and higher demand is reportedly contributing to the sentiment that a bullish market could be on the longer-term horizon.

In what is being described as its latest play to remain influential over global oil markets, OPEC welcomed Indonesia back into the cartel, making the Southeast Asian nation the only member country that is not a net exporter. Indonesia was a member of the cartel for 47 years and suspended its membership in 2009 when its balance between consumption and production shifted. OPEC is next scheduled to meet in December in Vienna, and during this meeting the country will officially rejoin as a member.

The domestic oil market remains oversupplied, and according to the most recent report from the U.S. Energy Information Administration, oil inventories continue to build despite domestic production declines. The price of West Texas Intermediate crude oil, the traditional U.S. benchmark, is expected to remain relatively low as seasonal refinery maintenance gets underway and demand for gasoline decreases as we enter the fall.

WTI closed out Friday’s formal trading session on the NYMEX down $1.29, capping a loss of nearly three percent for the week, and settled at $44.63 per barrel. At the close of Monday’s formal trading on the NYMEX, WTI settled down $0.63 at $44.00 per barrel. Today WTI is trading around $44 a barrel, compared to $46 a week ago. Crude prices are up about seven percent in the last month and are about $48 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 44th week in a row, there are no states with an average price for regular unleaded at or above $4 a gallon. Forty-seven states and Washington D.C. have averages below $3 per gallon, up from 46 states a week ago. Alabama and Mississippi join South Carolina as the states with an average below $2 a gallon.

For the third week in a row, Alaska has the most expensive gasoline in the country at $3.26 a gallon, followed by California at $3.15 (down 11 cents), Nevada at $3.05, Hawaii at $2.96, and Idaho at $2.80 (down a nickel and up from sixth last week). Washington is sixth at $2.78 (down a dime and down from fifth last week). Oregon is ninth down from eighth last week at $2.66 (down a dime). South Carolina has the cheapest gas in the nation for the 27th week in a row at $1.93 a gallon (down four cents from last week).

Diesel prices are also falling. The national average loses two cents to $2.53 a gallon. Oregon’s average dips four cents to $2.71. Diesel is at or above $4 a gallon in just one state, same as last week. Hawaii is most expensive at $4.45, followed by Alaska at $3.22, New York at $2.90, Connecticut at $2.88, and California at $2.87 (down two cents and fifth for the third week in a row). Washington is sixth for the second consecutive week at $2.83 (down three cents). Oregon is 10th for the second week in a row. Idaho is 11th for the fifth consecutive week at $2.70 (down a penny). A year ago, the national average for diesel was $3.78 and Oregon’s was $4.02.

Fuel prices are updated daily at AAA’s Daily Fuel Gauge at www.aaafuelgaugereport.com/. To check fuel prices across Oregon and the nation, go to the AAA Fuel Price Finder. AAA Oregon/Idaho provides more than 755,000 members with travel, insurance, financial and automotive-related services, and is an affiliate of AAA National, serving more than 55 million motorists in North America.