Gas Prices on Cruise Control, for Now

(PORTLAND, Ore.) - "Pump prices in most parts of the country are fairly flat this week, due in part to crude oil prices that have moved lower in the last month.

"For the week, the national average for regular unleaded holds steady at $2.29 a gallon, while Oregon’s average slips half a cent to $2.68," says AAA Oregon/Idaho Public Affairs Director Marie Dodds.

"Oregon drivers got socked with the second-largest monthly increase in the nation of 15 cents, as the switch to more expensive summer blend fuels has already taken place in the Pacific Northwest."

Oregon is one of 33 states and the District of Columbia to see prices decrease this week. The largest weekly decreases are in Delaware (-3 cents) and Wisconsin (-3 cents). The largest increases are in Indiana (+6 cents) and Ohio (+6).

Oregon is one of 18 states to see prices increase in the last month. The largest monthly increases are in Utah (+17 cents) and Oregon (+15 cents). The national average is one cent more than a month ago. The biggest monthly decrease is in Maine (-7 cents).

The seasonal switch to summer-blend fuel has already occurred at most of the regional refineries in the Pacific Northwest. This and other refinery work put a crimp in supplies, putting upward pressure on pump prices in this area.

Gas prices on the West Coast remain the highest in the country with six states in the region topping the list of most expensive U.S. markets: Hawaii, California, Washington, Alaska, Oregon and Nevada. Oregon is fifth most expensive for the third week in a row.

The latest US Energy Information Administration (EIA) report shows that gasoline inventories dropped to 29.027 million bbl for the week ending March 10, while regional refinery production increased 17 percent. OPIS reports that production increases are likely the result of the completion of a major 45-day turnaround at Phillips 66’s 107,500- b/d refinery in Ferndale, Washington.

The nation’s cheapest markets are South Carolina ($2.02) and Tennessee ($2.04).

Drivers are paying more to fill up compared to one year ago. The national average is currently 31 cents per gallon more and the Oregon average is 54 cents more than a year ago, which is the sixth largest yearly increase in the country.

States that have seen the largest yearly increases are Utah (+61 cents), Washington (+60 cents), Alaska (+59 cents), Idaho (+56 cents), New Jersey (+55 cents), Oregon (+54 cents) and Hawaii (+53 cents).

Oil Market Dynamics

While prices have been flat in recent weeks, a long-term bearish sentiment continues to underscore the global oil market as speculation about the balance between OPEC cuts and U.S. production drives the market.

Last Friday, OPEC’s Joint Technical Committee met to review compliance and participants’ level of adherence to the production cut agreement.

Following the JTC meeting, Russia agreed to drop total production by 300,000 barrels per day by the end of April and pledged to maintain that level until the deal expires at the end of June.

Saudi Arabia followed the compliance meeting with news that it may consider working with partner countries to continue the cuts beyond the June agreement deadline.

Even with OPEC’s compliance in the 90 percent range, U.S. production continues to cut into any rebalancing efforts by OPEC and non-OPEC countries.

On Friday, oil service company, Baker Hughes, reported that the U.S. rig count increased again last week when producers added 14 drilling rigs, bringing the total rig count to 631 in the United States. Traders will continue to watch whether OPEC and non-OPEC members make moves to further cut production in an attempt to balance the global oil supply.

At the close of Friday’s formal trading session on the NYMEX, WTI was up three cents to settle at $48.78 per barrel. At the close of Monday’s formal trading session, WTI fell 56 cents to settle at $48.22 per barrel. Today WTI is trading near $48, same as a week ago.

Crude prices are down about 12 percent in the last month and are about $9 more per barrel than a year ago. Current prices are less than half of the recent multi-year high of $114 per barrel in June 2014.

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

Diesel prices are slightly lower. For the week, the national average slips a penny to $2.51 a gallon. Oregon’s average also ticks down a penny to $2.67. A year ago the national average for diesel was $2.08 and the Oregon average was $2.09.