Skyrocketing Crude Prices Push Pump Prices Higher

(PORTLAND, Ore.) - The highest crude oil prices in seven years are driving increases in pump prices. U.S. crude oil climbed to more than $82 per barrel this week. Demand for gasoline has eased which should result in cheaper gas prices, but the higher crude prices are causing pump prices to rise.

For the week, the national average for regular jumps six cents to $3.34 a gallon. The Oregon average adds two cents to $3.78.

The national average is at its highest price since September 2014. The Oregon average is a little lower than its year-to-date high of $3.80 reached on August 19.

“Unfortunately, drivers won’t get relief at the pumps anytime soon due to the surging crude oil prices, as the cost of crude accounts for more than half of the price of each gallon of gas,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.

Crude prices started 2021 at about $48/bbl and climbed above $80/bbl last week. Growing demand for oil as the world recovers from the COVID-19 pandemic is fueling the gains, as is the potential for a cold winter in the northern hemisphere which could worsen tight oil supplies.

Demand for gasoline in the U.S. fell from 9.43 million b/d to 9.19 million b/d, but is still some 610,000 b/d above last year, according to the latest data from the U.S. Energy Information Administration (EIA). Total domestic gasoline supply fell by 2 million bbl to 223.1 million bbl.

Although the summer surge of COVID-19 cases in Oregon and the rest of the U.S. is waning, travel continues to be impacted by the pandemic. Visit AAA.com/covidmap for an interactive map with the latest travel restrictions and policies for North America.

Quick stats

Oregon is one of 45 states and the District of Columbia with higher prices now than a week ago. Oregon has the sixth-smallest weekly gain in the nation. Connecticut (+13 cents) has the largest weekly increase in the country. Michigan (-2 cents) has the largest week-over-week decline.

California ($4.51) and Hawaii ($4.21) continue to have the most expensive gas prices in the country and are the only states in the nation with averages above $4 a gallon, and 45 states and the District of Columbia are at or above $3, up from 44 states and D.C. a week ago.

The cheapest gas in the nation is in Texas ($2.97) and Oklahoma ($2.99). For the 41st week in a row, no state has an average below $2 a gallon.

Oregon is one 44 states and the District of Columbia with higher prices now than a month ago. The national average is 15 cents more and the Oregon average is 1.5 cents more than a month ago.

This is the smallest monthly gain in the country. The District of Columbia (+25 cents) has the largest month-over-month increase. Utah (-7 cents) has the largest monthly decrease in the country.

All 50 states and the District of Columbia have higher prices now than a year ago, and 47 states including Oregon and the District of Columbia have a current average that’s a dollar or more higher than a year ago.

The national average is $1.17 more and the Oregon average is $1.19 more than a year ago. This is the 22nd-largest yearly increase in the nation. Idaho (+$1.36) has the biggest yearly increase. Delaware (+96 cents) has the smallest year-over-year increase.

West Coast

California is the most expensive state for the 39th week in a row with Hawaii, Nevada, Washington, Oregon, and Alaska rounding out the top six. Arizona is 18th. Oregon is fifth for the second week in a row.

All seven states in the West Coast region are among the 36 states in the country that have averages above $3 a gallon.

All seven states in the region have weekly increases. Hawaii (+8 cents) has the largest weekly increase in the region; Washington (+1 cent) has the smallest.

The refinery utilization rate on the West Coast region rose from 86% to 87% for the week ending October 8. It has ranged from 85% and 88% much of the summer after remaining between about 82% and 84% in the spring.

According to EIA’s latest weekly report, total gas stocks in the region declined slightly from 30.21 million bbl to 29.55 million bbl.

Oil market dynamics

Crude oil prices increased last week despite the EIA reporting that total domestic crude inventories increased by 6.1 million bbl to 427 million bbl last week.

The current storage level is nearly 13 percent lower than the level at this same time last year. Given supply concerns, the market continues to bolster prices higher because of tight supply. Prices could climb further this week if EIA’s next report shows a decline in stocks.

At the close of Friday’s formal trading session, WTI increased by 97 cents to settle at $82.28. At the close of Monday’s formal trading session, WTI rose 16 cents to settle at $82.44. Today crude is trading around $83, up from $80 a week ago. Crude prices are about $42 more 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.

Diesel

For the week, the national average jumps eight cents to $3.56 a gallon. Oregon’s average adds three cents to $3.75. A year ago the national average for diesel was $2.38 and the Oregon average was $2.57.