But post-Labor Day, reduced demand and cheaper winter-blend fuel could bring relief
BOISE – (August 29, 2018) – In a summer marked by strong travel activity, Idaho gas prices recently landed among the top five most expensive in the country.
“In recent years, the Gem State has often ranked 7th to 9th in the nation for priciest fuel during the summer season, which is the result of high demand on a relatively small regional supply,” says Matthew Conde, public affairs director for AAA Idaho. “But the past few days have been a bit of a surprise – we generally don’t get anywhere near Oregon’s average gas price, let alone surpass it.”
Idaho pump prices reached an average of $3.26 per gallon on Monday, one cent higher than Oregon’s prices. Neighboring states have a range of prices: Washington ($3.37/gallon), Utah ($3.20/gallon), Wyoming ($2.99/gallon), Montana ($2.94/gallon), and Nevada ($3.19/gallon).
The national average is $2.83 – two cents less than a month ago and 47 cents more than a year ago.
According to the Energy Information Administration, the Rockies region, which produces one of the smallest amounts of finished petroleum products (about 0.4 million barrels) each day, recently saw gasoline inventories fall to 6.1 million barrels – the lowest mark in the region since August 2014.
“A fairly mild winter gave Idahoans an early jump on travel this year,” Conde said. “Massive travel gains (including Memorial Day and Independence Day), the global crude oil market, and repair issues at a Utah refinery all played a part in the higher fuel prices this summer, but as temperatures drop after Labor Day, there’s room for hope that gas prices will follow suit.”
Labor Day – another busy weekend
Labor Day weekend will likely motivate large numbers of travelers to bid farewell to the warm weather with one last getaway, albeit more locally, and gas prices could inch higher over the weekend in response (historical Labor Day pump prices are on the right). Later this fall, AAA projects that national fuel prices could dip as low as $2.70. Idaho prices often lag behind a national change, and could reach $3.10 a gallon or less.
“As the days get darker and school commitments keep families closer to home, the combination of reduced demand and the cheaper-to-produce winter-blend gasoline typically apply downward pressure on Idaho pump prices,” Conde said.
What could prevent a seasonal price drop?
Although AAA projects that pump prices savings are likely on the horizon, a few factors could slow or even reverse the typical seasonal pattern:
- Geopolitical tension among crude oil producers. Venezuela is a major crude oil producer in the Western Hemisphere, but the nation is on the brink of economic collapse, which could affect the international supply. The restoration of crude oil sanctions on Iran and slower-than-expected production increases by OPEC (Organization of Petroleum Exporting Countries) could also send shockwaves through the crude oil market and drive prices up.
This week, Iran claimed that it had secured control of the Strait of Hormuz and the Persian Gulf. A third of the world’s sea-traded oil passes through the region on a daily basis. If aggressions continue, crude oil supply chains could be disrupted.
- Hurricane activity. The National Oceanic and Atmospheric Administration’s Climate Prediction Center predicts a lower than average hurricane season, with a total of 9-13 named storms that include up to two major hurricanes. As hurricanes make landfall near sensitive infrastructure, including refineries, prices could be impacted as they were by Hurricane Harvey last year.
According to research company Baker Hughes, there are currently 860 producing oil rigs – 101 more active rigs than this time last year.
The West Texas Intermediate closed at $68.51 on Tuesday, up $8 from the beginning of the year.
Ways to save
“Tracking gas mileage can help you spot the early signs of car trouble,” Conde said. “If you notice a sudden decrease in fuel economy, take your vehicle to a trusted repair shop right away.”
Motorists can save money by paying for the grade of fuel that’s required by the manufacturer, rather than an expensive alternative. Topping off a fuel tank can also lead to wasteful fuel spills. In time for the Fall season, drivers can turn to AAA’s latest Gas Watcher’s Guide for more helpful hints.
Here’s a look at some gas prices across the Gem State: American Falls, $3.25; Ammon, $3.21; Blackfoot, $3.26; Boise, $3.30; Bonners Ferry, $3.16; Cascade, $3.46; Challis, $3.42; Coeur d’Alene, $3.07; Council, $3.31; Dalton Gardens, $3.05; Driggs, $3.33; Emmett, $3.26; Franklin, $3.20; Fruitland, $3.28; Glenns Ferry, $3.29; Hailey, $3.34; Idaho Falls, $3.23; Kamiah, $3.17; Ketchum, $3.50; Kooskia, $3.16; Lewiston, $3.21; Malad City, $3.26; Moscow, $3.27; Oakley, $3.42; Orofino, $3.21; Parma, $3.30; Pocatello, $3.24; Rupert, $3.32; Stanley, $3.72; Twin Falls, $3.26.