Pump Prices Fall for Fourth Consecutive Week

Lower Crude Oil Prices Help Bring Relief to Drivers

Gas price at the Seven Feathers Travel Center, Canyonville, OR. (6/16/22) Photo by Bonnie King Salem-News.com

(PORTLAND, Ore.) - The global price of crude oil has fallen about 20% in the last month, putting downward pressure on gas prices. All 50 states are seeing decreases at the pumps, despite an increase in demand for gasoline.

For the week, the national average for regular drops 14 cents to $4.66 a gallon. The Oregon average loses nine cents to $5.38.

“Crude oil reached a recent high of $122.11 per barrel on June 8, and today is trading at the recent low of $97 per barrel.

"The drop in price is driving lower pump prices, even with a rise in demand seen ahead of the robust July 4th travel period,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.

AAA projected record car travel for the holiday, with 42 million Americans driving to their Independence Day destinations.

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 53% of what we pay for in a gallon of gasoline is for the price of crude oil, 12% is refining, 21% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.

Crude prices remain higher than a year ago due to tight global supplies. A year ago, crude was around $74 per barrel compared to $97 today.

Demand for gasoline in the U.S. rose ahead of the July 4th holiday from 8.92 million b/d to 9.41 million b/d. Total domestic gas stocks decreased by 2.5 million bbl. for the week ending July 1, according to the U.S. Energy Information Administration (EIA).

Typically, an increase in demand and a decrease in supply would put upward pressure on pump prices; however, falling oil prices have contributed to lower pump prices.

Consumers can still enjoy a tasty AAA gas price–related treat courtesy of Krispy Kreme Doughnuts. Running every Wednesday through Labor Day, Krispy Kreme will lower the price of a dozen Original Glazed donuts to the national average that AAA reports each Monday.

A dozen glazed doughnuts typically cost around $12. This Wednesday’s dozen should cost $4.68, not including sales tax, and is available only in shop, drive-thru, or online pickup.

Quick stats

• All 50 states and the District of Columbia have lower prices now than a week ago. Texas (-19 cents) has the largest weekly drop. Hawaii (-1 cent) has the smallest.
• California ($6.06) is the most expensive state in the nation and is the only state to ever have an average above $6 a gallon. There are nine states, including Oregon, with averages at or above $5, down from 10 states a week ago. All states have averages at or above $4 a gallon.
• The cheapest gas in the nation is in Georgia ($4.16) and South Carolina ($4.16). No states have averages below $3 a gallon. For the 79th week in a row, no state has an average below $2 a gallon.
• Oregon is one of 46 states and the District of Columbia with lower prices now than a month ago. The national average is 36 cents less and the Oregon average is 16 cents less than a month ago.
• Oregon has the 5th-smallest monthly decrease in the nation. Indiana (-52 cents) has the largest monthly drop. Utah (+16 cents) has the largest month-over-month gain.
• All 50 states and the District of Columbia have higher prices now than a year ago, and all have a current average that’s at least $1.23 a gallon higher than a year ago. The national average is $1.51 more and the Oregon average is $1.71 more than a year ago.
• This is the 6th-largest yearly increase in the nation. Arizona (+$1.86) has the biggest yearly increase. Georgia (+$1.23) has the smallest year-over-year increase.

West Coast

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.

California is the most expensive state for the 77th week in a row with Hawaii, Alaska, Oregon, Nevada, and Washington rounding out the top six. Arizona is 10th.

Oregon rises to fourth after two weeks at fifth.

California (-18 cents) has the largest weekly drop in the region. Hawaii (-1 cent) has the smallest weekly decline in the region and nation.

The refinery utilization rate on the West Coast fell from 84.5% to 81.9% for the week ending July 1. The rate has ranged between about 76% and 90% in the last year.

According to EIA’s latest weekly report, total gas stocks in the region fell from 31.27 million bbl to 30.08 million bbl.

Oil market dynamics

For this week, crude prices continue to face strong headwinds as the market remains concerned that a potential recession will reduce demand for crude. If demand declines, crude prices will likely follow suit.

Additionally, EIA reported that total domestic crude stocks increased by 8.2 million bbl to 423.8 million bbl, which is nearly 22 million bbl lower than the storage level one year ago.

At the close of Friday’s formal trading session, WTI increased by $2.06 to settle at $104.79. At the close of Monday’s formal trading session, WTI slipped 15 cents to close at $104.64. Today crude is trading around $96, compared to $100 a week ago. Crude prices are about $29 more than a year ago.

Diesel

This is a nickel below the record high of $6.47 set on July 3. A year ago the national average for diesel was $3.27 and the Oregon average was $3.55.

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.

Source: AAA/Oregon