Oregon and other West Coast states are seeing some of the biggest weekly decreases in the nation. Gasoline supplies in the area are returning to normal as regional refinery issues are resolved. In addition, falling crude oil prices and demand for gas in the U.S. are also helping to push pump prices lower. For the week, the national average for regular loses five cents to $3.87 a gallon. The Oregon average plummets 22 cents to $5.30. This is the second-largest weekly drop for a state in the nation.
The Oregon average came within a penny of reaching a new record high this month when it got to $5.54 a gallon. It has decreased 24 cents since then. Both the national and Oregon averages hit record highs in mid-June, then declined for 14 consecutive weeks before rising again for the last three weeks. The national average reached its record high of $5.016 on June 14 while the Oregon average reached its record high of $5.548 on June 15.
“Pump prices on the West Coast soared last month after several California refineries underwent planned or unplanned maintenance creating a huge drop in supplies in this region. The situation is getting back to normal and pump prices in this region should continue to decline, barring unforeseen events,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
Crude oil prices are again below $90 per barrel due to global economic concerns. Crude reached a recent high of $122.11 per barrel on June 8, and ranged from about $94 to $110 per barrel in July. In August, crude prices ranged between about $86 and $97. In September, crude prices ranged between about $76 and $88 per barrel. So far in October, crude has ranged between $81 and $93 per barrel.
Crude prices rose dramatically leading up to and in the first few months of Russia’s invasion of Ukraine. Russia is one of the world’s top oil producers and its involvement in a war causes market volatility, and sanctions imposed on Russia by the U.S. and other western nations resulted in tighter global oil supplies. Oil supplies were already tight around the world as demand for oil increased as pandemic restrictions eased. A year ago, crude was around $82 per barrel compared to $83 today.
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.
Demand for gasoline in the U.S. decreased from 9.47 million b/d to 8.28 million b/d for the week ending October 7. This is significantly less than a year ago at this time when demand was 9.2 million b/d. Total domestic gasoline stocks increased by 2 million bbl to 209.5 million bbl. Falling demand and increasing stocks should put downward pressure on pump prices, especially with decreasing crude oil prices.