Gas Prices Decline but Crude Oil Rallies With Largest One-Day Gain Ever

(SALEM, Ore.) - Gas prices show another hefty drop this week, with the national average plummeting 13 cents, and the Oregon average for regular unleaded losing eight cents.

Oregonians are still enjoying prices below the national average, but the price of crude skyrocketed yesterday, posting its largest one-day gain ever. And many areas are still facing tight supplies as refineries slowly come back online in the wake of Hurricanes Gustav and Ike.

"Oregon's average and the national average for regular unleaded both show hefty declines for the past week, with the national average dropping 13 cents to $3.73 and the Oregon average losing eight cents to $3.64," says AAA Oregon Public Affairs Director Marie Dodds.

"It's the sixth day in a row the national average has fallen, after prices surged in the wake of Hurricane Ike," she said.

"The hurricane season is more than halfway over, the summer driving season has come to an end, and refineries that had been shut down because of Hurricanes Gustav and Ike are starting to come back on line. All of these things may push pump prices lower."

"At the same time, the dollar weakened against other currencies and crude oil prices rallied this week, after dropping below $100 per barrel for the first time in six months last week, and that puts upward pressure on prices. Currency exchange rates, problems in the financial markets, gasoline demand and inventories, and the price of crude will all determine what we pay for gas in the coming weeks."

The price of crude Monday posted the largest one-day gain ever, surging more than $25 to nearly $130 per barrel amid steep depreciation of the dollar and worries about the government's $700 billion bail-out plan for the U.S. economy. Crude ended the day Monday settling at nearly $121 per barrel. Today crude is sharply lower, trading at about $105 per barrel.

Gas prices are still highest in the South and parts of the Midwest because they were most affected by the refinery closures. Gas supplies are still tight as it can take several days to a few weeks for the refineries to get back up to full production. Some areas including Atlanta; Knoxville and Nashville, Tenn.; Tallahassee, Fla.; and Spartanburg, N.C. are facing limited fuel supplies and some panic-buying among consumers.

Despite the lower prices at the pumps, we're still paying about 75 to 95 cents more per gallon than we were a year ago. The national average was $2.81 last year, while Oregon's average was $2.88.

Oregon's gas prices are 32nd highest in the nation, up from 34th last week. Alaska has the most expensive gas in the country for the 13th week in a row at $4.32 a gallon, followed by Hawaii at $4.29, Illinois at $3.99, Georgia at $3.97, and North Carolina at $3.92. Washington is 22nd highest at $3.80, up from 25th last week. New Jersey has the least expensive gas in the country again this week at $3.45 per gallon. This week only two states have averages for regular unleaded at or above $4 per gallon, down from 12 last week in the aftermath of Hurricane Ike.

Diesel prices show a decline for the week. Oregon's average tumbles 16 cents to $4.07, while the national average drops eight cents to $4.11. Diesel averages are above $5 per gallon in just one state.

Hawaii has the highest statewide average price for diesel again this week at $5.14, followed by Alaska at $4.86, District of Columbia at $4.56, New York at $4.53, and Connecticut at $4.38.

Oregon's diesel prices are 28th most expensive this week, down from 19th last week. Washington's diesel prices are 18th, down from eighth last week. A year ago, the national average for diesel was $3.06 and Oregon's average was $3.06.