Gas prices continue to edge lower and the national and Oregon averages for regular gas have fallen to their lowest prices of the year so far. And the national average is poised to dip below $3 gallon for the first time since May 2021. Gas prices are expected to continue to decline as AAA projects record travel for Thanksgiving. For the week, the national average for regular dips two cents to $3.06 a gallon. The Oregon average falls five cents to $3.53 a gallon.

“Both the Oregon and national averages for regular gas are down to the lowest prices we’ve seen so far in 2024 and are expected to continue to edge lower as we approach Thanksgiving,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.

The Oregon average began 2024 at $3.79 a gallon compared to $3.53 today, which is the lowest price so far in 2024. Its previous low price this year was $3.58 on February 14 and the highest is nearly $4.51 on May 1. The national average started the year at $3.11 and is at $3.06 today, which is the lowest price so far in 2024. The previous low price this year was just under $3.07 on January 15 and the highest is just under $3.68 on April 19.

This week, all Oregon counties have averages below $4 a gallon. Last week, Wallowa still had an average above $4 at $4.12 per gallon.

Cheaper gas prices are here in time for Thanksgiving travel. AAA projects record travel for the holiday with nearly 80 million Americans including 1.1 million Oregonians traveling for turkey. Car travel and air travel will set new records this year. Find all the details and tips for travelers in the AAA Thanksgiving news release.

Gas prices typically drop in the fall, due to the switch from summer-blend to winter-blend fuel, which costs less to produce. The switch starts in September. Many areas, including Oregon, can sell winter-blend fuel starting September 15. However, Northern and Southern California require summer-blend fuel through October 31.

Meanwhile, crude oil production in the U.S. remains near the record high. The U.S. Energy Information Administration (EIA) reports that crude production in this country is at 13.4 million barrels per day for the week ending Nov.8. This is just under the record production of 13.5 million barrels per day. The U.S. has been the top producer of crude oil in the world since 2018 and has been increasing its oil production since about 2009.

The U.S. price of crude oil (West Texas Intermediate) has been between about $67 and $74 per barrel since mid-October.

Crude prices are impacted by economic news as well as geopolitical events around the world including the unrest in the Middle East and the war between Russia and Ukraine. In addition, production cuts by OPEC+ have tightened global crude oil supplies, which will continue to impact prices. Hurricane season can also impact crude oil prices, if a major storm impacts infrastructure in the Gulf of Mexico. Hurricane season runs from June 1 to November 30.

The price of crude oil reached the year-to-date high of nearly $87 per barrel on April 5. Major drivers of elevated crude prices have been the unrest in the Middle East, the decision by OPEC+ to keep oil production cuts in place, and Ukrainian attacks on Russian refineries. Russia is a top global oil producer, behind the U.S. and Saudi Arabia, and the refinery attacks have reduced output. Crude prices have been volatile after the attack on Israel by Hamas in October 2023. While Israel and the Palestinian territory are not oil producers, concerns remain that the conflict could spread in the Middle East, which could potentially impact crude production in other oil-producing nations in the region.

Crude oil is trading around $69 today compared to $68 a week ago and $78 a year ago. In 2023, West Texas Intermediate ranged between $63 and $95 per barrel. Crude reached recent highs of $123.70 on March 8, 2022, shortly after the Russian invasion of Ukraine, and $122.11 per barrel on June 8, 2022. The all-time high for WTI crude oil is $147.27 in July 2008.

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, 11% is refining, 20% distribution and marketing, and 16% are taxes, according to the U.S. Energy Information Administration.

Demand for gasoline in the U.S. rose from 8.82 million b/d to 9.38 million b/d for the week ending November 8, according to the U.S. Energy Information Administration (EIA). This compares to 8.95 million b/d a year ago. Meanwhile, total domestic gasoline stocks fell from 211.3 million barrels to 206.8, while gasoline production increased last week, averaging 10.3 million barrels per day.

As noted above, crude oil production in the U.S. slips from 13.5 million barrels per day to 13.4 million barrels per day, according to the EIA. The U.S. produces more crude oil than any other country, according to the EIA.

Pump prices should continue to ease, if crude oil prices remain relatively low.

Quick stats

Oregon is one of 38 states where prices are lower now than a week ago. Delaware (+16 cents) has the largest week-over-week increase in the nation. New Mexico (-11 cents) has the biggest week-over-week drop.

Hawaii ($4.57) has the most expensive gas in the nation for the third week in a row. California ($4.45) is second. These are the two states with averages still at or above $4 a gallon. Washington finally dropped below the $4 mark in the last week. This week 20 states and the District of Columbia have averages in the $3-range. There are 28 states with an average in the $2 range this week.

The cheapest gas in the nation is in Oklahoma ($2.57) and Mississippi ($2.63). No state has had an average below $2 a gallon since January 7, 2021, when Mississippi and Texas were below that threshold. At the time, the COVID-19 pandemic drove significant declines in crude oil and gasoline demand in the U.S. and around the world.

The difference between the most expensive and least expensive states is $2.01 this week, compared to $2.00 a week ago.

Oregon is one of 46 states and the District of Columbia with lower prices now than a month ago. The national average is 12 cents less and the Oregon average is 14 cents less than a month ago. Utah (-33 cents) has the largest month-over-month drop in the nation. Delaware (+4 cents) has the largest month-over-month increase.

Oregon is one of 48 states and the District of Columbia with lower prices now than a year ago. The national average is 25 cents less and the Oregon average is 59 cents less than a year ago. This is the largest year-over-year drop in the nation. Georgia (+10 cents) has the biggest year-over-year increase.

West Coast

The West Coast region continues to have the most expensive pump prices in the nation with six of the seven states in the top 10. It’s typical for the West Coast to have six or seven states in the top 10 as this region tends to consistently have fairly tight supplies, consuming about as much gasoline as is produced. 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.

As mentioned above, Hawaii has the most expensive gas in the country for the third week in a row. California, Washington, Nevada, Oregon, and Alaska round out the top six. Arizona ($3.18) is 11th. Oregon is fifth for the 14th week in a row.

All seven states in the West Coast region are seeing small declines in gas prices on the week: Alaska (-6 cents), Oregon (-5 cents), California (-5 cents), Washington (-3 cents), Nevada (-1 cent), Hawaii (-1 cent), and Arizona (-1 cents).

The refinery utilization rate on the West Coast slipped from 87.5% to 87.1% for the week ending November 8. This rate has ranged between about 76% to 92% in the last year. The latest national refinery utilization rate increased from 90.5% to 91.4%. The refinery utilization rate measures how much crude oil refineries are processing as a percentage of their maximum capacity. A low or declining rate can put upward pressure on pump prices, while a high or rising rate can put downward pressure on pump prices.

According to EIA’s latest weekly report, total gas stocks in the region increased from 25.80 million bbl. to 26.47 million bbl.

A decrease in the refinery utilization rate and/or a low rate can put upward pressure on pump prices, and an increase in gasoline stocks can put downward pressure on pump prices.

Oil market dynamics

Prices were higher to start this week, driven in part by the Biden Administration’s decision to allow Ukraine to use long-range missiles provided by the U.S. to target Russia, which is one of the world’s top oil producers. Prices have steadied today. Crude oil prices declined last week mostly due to a supply glut. The International Energy Agency has forecast a surplus of more than 1 million barrels per day in 2025 on strong production by the U.S. Meanwhile, the EIA reports that crude oil inventories increased by 2.1 million barrels from the previous week. At 429.7 million barrels, U.S. crude oil inventories are about 4% below the five-year average for this time of year.

At the close of Friday’s formal trading session, WTI fell $1.68 to settle at $67.02. At the close of Monday’s formal trading session, WTI rose $2.14 to settle at $69.16. Today crude is trading around $69 compared to $68 a week ago. Crude prices are about $9 less 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 ticks down one cent to $3.54 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average dips two cents to $3.86. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $4.30 and the Oregon average was $4.73.

Source: AAA

Eric Rosado