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Jan-20-2009 12:09printcomments

Crude Prices Fall while Gas Prices Keep Climbing

As a new U.S. president begins his term, there seems to be a disconnect between oil and gas prices. Crude oil has been hovering below $40 per barrel, yet we've seen pump prices increase. In fact, our Oregon average is up 23 cents in the past month to $1.96 a gallon.

Oregon gas prices
Prices in Oregon this week.
Photo by Bonnie King

(PORTLAND, Ore.) - Oregon AAA's Marie Dodds says gas prices seem to be defying gravity as they continue to rise, even though crude prices have been hovering below $40 per barrel.

Last Friday, crude closed at $34.78, the lowest price since April 2005, when the nationwide average for regular unleaded was $1.76 per gallon. The national average now is $1.84, up five cents in the past week. Oregon's average increases four cents to $1.96.

Dodds says, "The difference between 2005 and now is that demand for gas was increasing four years ago, instead of declining as it is now, so we're seeing a disconnect between oil and gas prices. We've seen volatility in most financial markets, so some price anomalies are to be expected. But there doesn't seem to be any rational explanation for the recent run-up in pump prices over the past few weeks, as prices have had nothing to do with supply and demand. This is normally the time of year when demand for gas reaches its lowest point of the year."

Crude oil prices are volatile today, as it's the last day of trading for the February contract. Crude dipped to around $33 earlier in the session, and then bounded back to around $38 per barrel, same as last week. The President of OPEC says today that the cartel is trying to match supply with demand, and that crude has the potential to recover to $75 per barrel during 2009. OPEC is enforcing production cuts which went into effect at the first of the year.

Gas prices have shot up in the past month. The Oregon average is up 23 cents, while the national average has jumped up 18 cents. But despite the increases, gas prices are still well below where they were a year ago. The national and Oregon averages were both at $3.01.

Salem's price of $1.949 is hte best price in the state; stations certainly are found with prices several cents above and below that price. Portland follows with an average of $1.960 for a gallon of regular. Drivers in the Eugene/Springfield area are paying an average of $1.987 for a gallon of regular, and the average cost for gas in the Medford/Ashland area is $2.041. Drivers in the Vancouver, Washington area are paying an average of $2.022 for self-serve regular.

Five states have averages for regular unleaded at or above $2 a gallon, up from three last week.

The most expensive gas in the country for the 30th week in a row is Alaska at $2.48, followed by Hawaii at $2.32, California at $2.07, Washington at $2.01 and Nevada at $2.00.

Washington was also fourth most expensive last week. Oregon's gas prices are eighth highest, up from ninth last week. Wyoming has the least expensive gas again this week with regular unleaded at $1.48 a gallon.

Diesel prices are down slightly for the week. The national average decreases a cent to $2.42, while Oregon’s average drops two cents to $2.52 Hawaii has the highest statewide average price for diesel again this week at $3.94, followed by Alaska at $3.52, New York at $2.83, Connecticut at $2.80 and District of Columbia at $2.71.

Oregon's average diesel price is 14th most expensive this week, up from 15th last week. Washington's diesel price drops a penny to $2.62 which is ninth highest, same as last week. A year ago, the national average for diesel was $3.39 and Oregon's average was $3.35.

Source: Oregon AAA

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Johnson January 20, 2009 2:25 pm (Pacific time)

DOW closed at 9625 on November 4, 2008. Today on January 20, 2009 it has closed at 7,949. Today's drop is a negative -4.01%. I mention these numbers because at various times since 11/05/08 after Obama had given a speech and the stock market had gone up, it was reported and alluded to that he provides confidence to the market and that's why it has gone up. So will today's numbers, his swearing in day as president, be considered as a lack of market confidence? Will it even be reported beyond the business pages?

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