AAA expects 2023 to be second-busiest for holiday travel
PORTLAND, Ore., – Pump prices are at their seasonal lows as millions of Americans head out on holiday trips. Prices are down week-over-week in 48 states, including Oregon. However, the national average has ticked up overnight, signaling that it could have bottomed out. The major drivers are higher crude oil prices and an increase in demand for gas. We may stay near these numbers until early 2024. For the week, the national average for regular loses six cents to $3.08 a gallon. The Oregon average also drops six cents to $3.85.
“Pump prices at seasonal lows are sleighing it at the pumps in time for holiday travel. This year is shaping up to the second-busiest ever for holiday travel and those driving will have some extra jingle in their pockets thanks to relatively low gas and diesel prices,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “However, higher crude oil prices and an increase in demand for gasoline could put some upward pressure on pump prices over the holidays.”
AAA projects 2023 to be the second-busiest for holiday travel since 2000 when AAA began tracking holiday travel, only behind 2019. AAA projects 115.2 million Americans (33.8% of the population) will travel 50 miles or more for the Christmas and New Year holidays. This is up 2.2% from 2022. About 1.63 million Oregonians will pack their sleighs for a holiday trip. Find all the details and tips for travelers in the AAA holiday travel news release.
The national average is at its lowest price since June 2021. The Oregon average is at its lowest price since last February. Prices may have bottomed out for the season and could remain near their current prices until early 2024. Pump prices often start to increase again in the first quarter.
Those driving to their holiday destinations will find gas prices similar to last Christmas, when the national average for regular gas was $3.10 and the Oregon average was $3.77.
The national average for regular had been steadily falling since reaching its year-to-date high of $3.88 on September 18. The Oregon average has been moving lower since reaching its year-to-date high of $4.77 on August 30. However, the national average ticked up more than a cent overnight, signaling that it may have bottomed out for the season.
Most Oregon counties have averages below $4 a gallon. The only counties with averages at or above $4 are:
Clackamas $4.01
Coos $4.15
Curry $4.39
Grant $4.25
Harney $4.05
Lake $4.06
Multnomah $4.21
Sherman $4.20
Wallowa $4.01
Washington $4.01
Crude oil prices have risen in the last few days after attacks on commercial vessels in the Red Sea. Some shipments have been halted after ships were attacked by rebels in Yemen. The U.S. is part of an international naval operation to protect ships in the area, which is an important shipping lane between Europe and Asia.
Crude prices ticked up in late November as OPEC+ (Organization of the Petroleum Exporting Countries and allies such as Russia) announced additional voluntary oil production cuts of 900,000 barrels a day, and Saudi Arabia said it would continue its cuts of a million barrels a day through March. Crude oil prices jumped ahead of the announcement, but then fell and have remained in the upper $60s to lower $70s.
Crude oil prices were volatile at the start of the conflict between Israel and Hamas in October. Fears that the conflict could escalate across the Middle East sent crude oil prices near $90 per barrel in October. Crude prices fell into the $70s on November 7, and dipped below $70 last week. While Israel and the Palestinian territory are not oil producers, there’ve been concerns 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 prices tend to rise when there are geo-political events involving oil producers. Crude 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. Crude prices also surge on news of production cuts by major oil producers. Crude oil prices spiked 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.
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 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.
Crude oil is trading around $74 today compared to $69 a week ago and $76 a year ago. So far this year, West Texas Intermediate has ranged between $63 and $94 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 57% of what we pay for in a gallon of gasoline is for the price of crude oil, 7% is refining, 22% distribution and marketing, and 14% are taxes, according to the U.S. Energy Information Administration.
Demand for gas in the U.S. increased from 8.47 to 8.86 million b/d for the week ending December 9, according to the U.S. Energy Information Administration (EIA). This compares to 8.26 million b/d at the same time last year. Meanwhile, total domestic gasoline stocks increased slightly to 224 million bbl.
Higher demand typically helps push pump prices higher, as do higher oil prices. So pump prices could climb a bit over the holidays or stay relatively stable.
Quick stats
Oregon is one of 47 states and the District of Columbia with lower prices now than a week ago. Michigan (-14 cents has the biggest weekly drop. Delaware (+2 cents) and Iowa (+1 cent) are the only states with week-over-week increases. The average in South Carolina is flat.
After 20 weeks, Hawaii ($4.69) bumps California ($4.60) as the state with the most expensive gas in the nation. Washington ($4.19) is third. These are the three states with averages at or above $4, compared to four states a week ago. This week 18 states and the District of Columbia have averages in the $3-range. Twenty-nine states have averages in the $2 range this week.
The cheapest gas in the nation is in Texas ($2.60) and Mississippi ($2.63). 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 $2.10 this week, same as a week ago.
Oregon is one of 49 states and the District of Columbia with lower prices now than a month ago. The national average is 23 cents less and the Oregon average is 27 cents less than a month ago. Indiana (-52 cents) has the largest monthly drop. Hawaii (-4 cents) has the smallest. Georgia (+16 cents) is the only states with a month-over-month increase.
Oregon is one of seven states with higher prices now than a year ago. The national average is six cents less and the Oregon average is half a cent more than a year ago. Utah (-58 cents) has the largest yearly decrease. Washington (+24 cents) has the largest yearly 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.
| Rank | Region | Price on 12/19/23 |
| 1 | Hawaii | $4.69 |
| 2 | California | $4.60 |
| 3 | Washington | $4.19 |
| 4 | Nevada | $3.91 |
| 5 | Oregon | $3.85 |
| 6 | Alaska | $3.73 |
| 7 | Pennsylvania | $3.43 |
| 8 | New York | $3.41 |
| 9 | Vermont | $3.35 |
| 10 | Idaho | $3.31 |
As mentioned above, Hawaii bumps California as the state with the most expensive gas in the country. California slips to second with Washington, Nevada, Oregon, and Alaska rounding out the top six. Arizona is 15th. Oregon is fifth most expensive for the ninth week in a row.
Like most every other state in the nation, all states in the West Coast region are seeing week-over-week declines. Arizona (-13 cents) has the largest weekly drop in the region. Nevada (-11 cents), California (-11 cents), Alaska (-8 cents), Washington (-7 cents), Oregon (-6 cents), and Hawaii (-3/10ths of a cent) are also seeing weekly declines.
The refinery utilization rate on the West Coast fell from 85.4% to 83.3% for the week ending December 8. This rate has ranged between about 73% to 96% in the last year. The latest national refinery utilization rate declined slightly from 90.5% to 90.2.
According to EIA’s latest weekly report, total gas stocks in the region increased from 26.51 million bbl.to 26.82 million bbl.
A lower refinery utilization rate can put upward pressure on pump prices, while an increase in gasoline stocks can put downward pressure on pump prices.
Oil market dynamics
Crude oil prices rose after commercial vessels were attacked in the Red Sea in a major shipping lane between Asia and Europe. Oil prices also increased last week after the US Federal Reserve announced that it plans to hold interest rates steady through the end of the year and potentially reduce it up to three times in 2024. The market had been concerned that the economy could tip into a recession if interest rates kept increasing. Oil demand and prices would likely decline if a recession occurred. Additionally, the EIA reported that total domestic commercial crude inventories decreased by 4.3 million bbl to 440.7 million bbl last week.
At the close of Friday’s formal trading session, WTI slipped 15 cents to settle at $71.43. At the close of Monday’s formal trading session, WTI climbed $1.04 to settle at $72.47. Today crude is trading around $74 compared to $69 a week ago. Crude prices are about $2 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.
Diesel
For the week, the national average falls eight cents to $4.02 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average loses nine cents to $4.43. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $4.77 and the Oregon average was $4.95.
Find current fuel prices at GasPrices.AAA.com.
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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 64 million motorists in North America.