Pump Prices Hold Steady Amid Tensions with Iran

PORTLAND, Ore., – Gas price averages are showing little movement this week but that could change if crude oil prices fluctuate due to geopolitical concerns surrounding events in the Middle East. For the week, the national average for regular remains at $2.59 a gallon. The Oregon average falls a penny to $3.02.

National Oregon Local Gas Prices Chart 1-7-2020

Gas prices are starting 2020 at higher prices than at the start of 2019. The national average is about 35 cents more and the Oregon average about 10 cents more than a year ago.

Following airstrikes in Baghdad last Friday, which killed Iran’s Major General Qassem Soleimani, crude oil prices increased, causing market speculation about what could happen to gas prices in the near-term.

“Crude prices usually climb following news of unrest in the Middle East. Whether this is a short- or long-term trend will depend on how long crude sells at a higher price point. In general, every $1 increase in the price of crude oil results in about a 2-and-a-half-cent increase in the price of gasoline,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.

Oregon is one of 21 states and the District of Columbia where gas prices are lower now than a week ago. Ohio (-8 cents) has the largest weekly decline in the country. Florida (+7 cents) has the biggest weekly jump. Prices in New Mexico and North Carolina are flat.

This week there are six states with an average above $3 a gallon, same as a week ago. For the eighth week in a row, there are no states with an average above $4 a gallon. California’s average had topped the $4 mark last fall.

The cheapest gas in the nation can be found in Missouri ($2.22) and Oklahoma ($2.28). For the 47th week in a row, no states have an average below $2 a gallon.

Oregon is one of 22 states with lower prices now than a month ago. The national average is half a cent more and the Oregon average is 13 cents less than a month ago. This is the eighth-largest monthly decrease in the nation. Idaho (-26 cents) has the largest month-over-month decline, Nevada (-21 cents) is second, Utah (-19 cents) is third and California (-18 cents) is fourth. Delaware (+9 cents) has the largest month-over-month increase.

Drivers in every state except Alaska are paying more than a year ago. The national average is 35 cents more and the Oregon average is 10 cents more than a year ago. Ohio (+59 cents) and Illinois (+54 cents) have the biggest year-over-year increases. Alaska (-4 cents) is the only state with a year-over-year drop.

 

West Coast

The West Coast continues to have the highest pump prices in the nation with all the region’s states landing on the top 10 most expensive list. However, prices are falling in all states in the region.

Rank Region Price on 1/7/20
1 Hawaii $3.65
2 California $3.54
3 Washington $3.15
4 Nevada $3.02
5 Oregon $3.02
6 Alaska $2.97
7 Pennsylvania $2.83
8 Arizona $2.83
9 New York $2.73
10 District of Columbia $2.72

Hawaii is most expensive for the fourth week in a row with California, Washington, Nevada, Oregon, and Alaska rounding out the top six. Oregon is fifth most expensive for the 25th week in a row. Arizona is eighth.

Increased gasoline stocks continue to help put downward pressure on pump prices, even as demand remains robust. According to the U.S. Energy Information Administration’s report for the week ending on Dec. 27, total gas stocks in the region are mostly holding steady at 21.56 million bbl. The current supply level is 3.3 million bbl higher than last year’s level at this time, which will likely continue to help prices in the region decline throughout the week.

 

Oil market dynamics

Crude oil prices rose last week after the U.S. announced that it conducted a drone strike at an airport in Baghdad and killed Major General Qassem Soleimani – a top military leader in Iran. The incident has escalated tension in the region, raising the possibility that global crude supplies could be disrupted. As market concerns over geopolitical risk increase, crude prices have increased amid uncertainty over how long tensions may continue to rise in the region. Crude prices may rise further this week if tensions continue to mount.

In related news, EIA’s weekly report revealed that total domestic crude inventories decreased by 11.5 million bbl last week, bringing the total to 429.9 million bbl. The current level is 11.5 million bbl lower than last year’s level.

At the close of Friday’s formal trading session on the NYMEX, WTI increased by $1.87 to settle at $63.05. At the close of Monday’s formal trading session on the NYMEX, WTI added 22 cents to close at $63.27. Today crude is trading around $63, compared to $61 a week ago. Crude prices are up about six percent in the last month and are about $15 per barrel more than a year ago.

national gas price comparison 1-6-2020

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 find the closest EV charging stations, 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 adds a penny to $3.02 a gallon. Oregon’s average loses a penny to $3.27. A year ago, the national average for diesel was $2.96 and the Oregon average was $3.15.

 

Find current fuel prices at GasPrices.AAA.com.

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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 820,000 members with travel, insurance, financial and automotive-related services, and is an affiliate of AAA National, serving more than 60 million motorists in North America.