Drivers are getting a Halloween treat as gas prices decrease in all 50 states this week. However, the conflict in the Middle East is preventing significant drops in pump prices because of volatile crude oil prices. For the week, the national average loses seven cents to $3.48. The Oregon average tumbles 10 cents to $4.34. Oregon has the ninth-largest weekly decline for a state in the nation.
The national average is at its lowest price since March. The Oregon average is at its lowest price since June.
“Crude oil prices have been volatile since the start of the conflict between Israel and Hamas. Fears that the conflict could escalate across the Middle East sent crude oil prices near $90 per barrel earlier this month. This week, crude prices are back in the low- to mid-$80 range. Expect continued volatility in crude oil prices which will continue to temper decreases in pump prices,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “The conflict will continue to impact crude oil prices. While Israel and the Palestinian territory are not oil producers, concerns remain that the conflict has the potential to impact crude production in other oil-producing nations in the region.”
Crude oil prices tend to rise when there are geo-political events involving oil producers. Crude prices spiked after the invasion of Ukraine by Russia last year because Russia is one of the world’s top oil producers, behind the U.S. and Saudi Arabia.
Gas prices normally decline in the fall, in part due to a drop in demand for gasoline compared to the summer months and the switch from summer-blend gas to winter-blend gas. Winter-blend gas is cheaper to produce than summer-blend fuel as it contains ingredients such as butane, so gas prices normally fall when the switch occurs. Summer-blend gas helps reduce emissions from gasoline during the warm summer months. More info on summer- and winter-blend gasoline can be found at the EPA website. The switch occurs on September 15 except California, which normally keeps summer-blend gasoline until October 31. This year, California allowed the switch to occur earlier because of refinery issues in that state that sent pump prices soaring on the West Coast in late September.
After the horrific attack on Israel by Hamas on October 7, crude oil prices increased by a few dollars but did not climb above $90. Crude oil prices surged above $90 per barrel in mid-September, the highest price since last November, in response to the announcement from Saudi Arabia and Russia that they would keep their production cuts in place through 2023. The cuts are one million barrels a day by Saudi Arabia and 300,000 barrels a day by Russia.
Crude oil is trading around $82 today compared to $84 a week ago and $87 a year ago. In September, West Coast Intermediate ranged between about $85 and $94 per barrel. In August, WTI ranged between about $77 and $85 per barrel. In July, West Texas Intermediate ranged between about $69 and $82 per barrel. In June, WTI ranged between about $67 and $73 per barrel. In May, WTI ranged between about $63 and $77 per barrel. In April, WTI ranged between about $73 and $83. In March, WTI ranged between about $64 and $81 per barrel. In February, WTI ranged between about $73 and $80 per barrel. In January, WTI ranged between about $73 and $82 bbl. 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 50% of what we pay for in a gallon of gasoline is for the price of crude oil, 25% is refining, 11% distribution and marketing, and 14% are taxes, according to the U.S. Energy Information Administration.
Demand for gasoline decreased from 8.94 to 8.86 million b/d for the week ending October 20, according to the U.S. Energy Information Administration (EIA). This compares to 8.93 million b/d a year ago. Meanwhile, total domestic gasoline stocks increased slightly to 223.5 million bbl.
Lower gas demand, alongside declining oil prices, has contributed to pushing pump prices down. If oil prices continue to descend, drivers can expect further price drops at the pump in the weeks ahead.
Quick stats
All 50 states and the District of Columbia have lower prices now than a week ago. Arizona (-18 cents and California (-15 cents) have the biggest weekly drops. Hawaii (-1 cent) has the smallest weekly decline.
California ($5.27) has the most expensive gas in the nation for the 14th week in a row and is the only state with an average at or above $5 a gallon. Hawaii ($4.76) is second, Washington ($4.68) is third, Nevada ($4.58) is fourth, Oregon ($4.34) is fifth, and Alaska ($4.26) is sixth. These are the six states with averages at or above $4. Last week, there were seven states with averages at or above $4 a gallon. This week 41 states and the District of Columbia have averages in the $3-range. Three states have averages in the $2 range this week.
The cheapest gas in the nation is in Georgia ($2.95), Texas ($2.96) and Mississippi ($2.96). It’s the first time since March that one or more states have had averages below $3 a gallon. No state has had an average below $2 a gallon since January 7, 2021, when Mississippi and Texas were below that threshold.
The difference between the most expensive and least expensive states is $2.31 this week, compared to $2.41 a week ago.
All 50 states and the District of Columbia have lower prices now than a month ago. The national average is 35 cents less and the Oregon average is 43 cents less than a month ago. Oregon has the sixth-largest monthly drop for a state in the nation. California (-81 cents) has the largest monthly drop. Hawaii (-12 cents) has the smallest.
Oregon is one of 49 states and the District of Columbia with lower prices now than a year ago. The national average is 28 cents less and the Oregon average is 63 cents less than a year ago. This is the second-largest yearly drop in the nation. Michigan (-66 cents) has the largest yearly decrease. Florida (-18 cents has the smallest yearly decline. Colorado (+9 cents) is the only state with a year-over-year increase.
Diesel
For the week, the national average falls five cents to $4.46 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average loses five cents to $4.93. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $5.31 and the Oregon average was $5.62.
Source: AAA