AAA expects Volatility to Continue
PORTLAND, Ore., – Drivers have been paying unseasonably high pump prices this fall due to fuel disruptions on the West Coast and in the Southeast as well as higher crude oil prices. Finally, gas prices are declining in most states, including Oregon. For the week, the national average drops four cents to $2.85 while Oregon’s average ticks down a penny to $3.38.
Two weeks ago, a natural gas pipeline rupture in British Columbia, Canada forced three Pacific Northwest (PNW) Puget Sound refineries to shut production units. Those refineries are now back online, but states in the PNW saw spikes in gas prices due to the decreased output.
“Gas prices have been edging lower despite market concerns about global supply and geopolitical tensions. That could change in the next week or two ahead of the U.S. announcement of imposed sanctions on Iran on Nov. 4, and the U.S. election on Nov. 6. In addition, markets will watch U.S.-Saudi Arabia relations in the aftermath of the killing of journalist Jamal Khashoggi,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
Oregon is one of 44 states and the District of Colombia where prices have decreased week-over-week. Ohio has the largest weekly decrease (-11 cents). Hawaii has the largest weekly increase (+1 cent). Prices in Alaska, Washington and Utah are the same as a week ago. This week 11 states have averages at or above $3 a gallon, same as last week.
Oregon is one of 25 states where prices are higher now than a month ago. The national average is half a cent less and the Oregon average is 13 cents more than a month ago. California has the largest monthly increase (+17 cents) while Ohio (-26 cents) has the largest monthly decrease.
The West Coast continues to have the most expensive gas prices in the nation. Hawaii tops the list for the 20th week in a row with California, Washington, Alaska, Oregon, Nevada and Idaho rounding out the top seven. Oregon is fifth down from fourth a week ago. On the week, most prices are fairly flat.
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The Energy Information Administration’s (EIA) weekly petroleum status report showed West Coast gasoline stocks decreased slightly to 27.6 million bbl during the week that ended on October 12. Stocks are approximately 1.5 million bbl lower than where they were at this time last year. This could cause prices to spike if there is another supply challenge in the region this week.
The nation’s cheapest markets are Ohio ($2.55) and Delaware ($2.55). For the 64th week in a row, no states have an average below $2.
Drivers in all 50 states and the District of Columbia are paying more than a year ago to fill up. The national average is 39 cents more and the Oregon average is 63 cents more than a year ago. This is the third-largest yearly increase in the country. Hawaii (+80 cents) has the greatest year-over-year increase; California (+78 cents) is second; Washington (+62 cents) is fourth; and Nevada (+60 cents) is fifth.
Oil Market Dynamics
Crude oil prices have moved lower over the past several days following assurances from Saudi Arabia that it would play a “responsible role” in energy markets, and last week’s EIA weekly petroleum report, which showed domestic crude inventories grew by 6.5 million bbl. Total crude inventories now sit at 416.4 million bbl, marking the fourth week of consecutive growth and highest level since late June. The larger-than-expected growth in crude levels shocked the market, leading crude prices to fall.
This week, prices could rise again due to concerns about U.S.-Saudi Arabia relations in the aftermath of the killing of journalist Jamal Khashoggi and upcoming U.S.-imposed sanctions on Iran’s crude exports which begin Nov. 4.
In related news, Baker Hughes, Inc. reported that the U.S. gained four oil rigs last week, bringing the total to 873. When compared to last year at this time, there are 137 more rigs now than in 2017.
At the close of Friday’s formal trading session on the NYMEX, WTI increased 47 cents to settle at $69.12. At the close of Monday’s formal trading session on the NYMEX, WTI added five cents to settle at $69.17. Today crude is trading around $66, compared to $72 a week ago. Crude prices are down about eight percent in the last month and are about $18 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 dips half a cent to $3.29 a gallon. Oregon’s average adds a penny to $3.46. A year ago the national average for diesel was $2.73 and the Oregon average was $2.94.
Find current fuel prices at GasPrices.AAA.com.
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