Surge in demand, tight inventories send prices higher in Oregon, Idaho
PORTLAND, Ore., – “Gas prices are climbing in locations along the path of totality of next Monday’s total solar eclipse. Demand for gasoline has already been very robust due to a healthy summer travel season. Add about a million eclipse viewers in Oregon and 500,000 in Idaho and that creates even more demand for fuel. For the week, the national average for regular unleaded remains at $2.35 a gallon. Oregon’s average climbs three cents to $2.72 and Idaho’s average leaps eight cents to $2.66, which is the biggest weekly jump in the nation,” says AAA Oregon/Idaho Public Affairs Director Marie Dodds. “The eclipse on August 21 and the upcoming Labor Day holiday weekend will likely lead to some of the highest prices at the pump this year.”
Oregon is one of 29 states where gas prices increased in the last week. The largest weekly increases are in Idaho (+8 cents) and Utah (+7 cents). Delaware has the largest weekly drop (-5 cents).
Oregon is one of 49 states and the District of Columbia to see pump prices rise in the last month. The largest monthly increase is in Florida (+13 cents). Arizona is the only state where prices are flat month-over-month. The national average is 10 cents more and the Oregon average is five cents more than a month ago.
The West Coast continues to have the highest gas prices in the country. Hawaii remains the only state with an average at or above $3. California, Washington, Alaska, Oregon, Idaho and Nevada round out the top seven most expensive states. Oregon is fifth most expensive for the seventh week in a row.
|Rank||Region||Price on 8/15/2017|
|8||District of Columbia||$2.57|
West Coast gasoline inventories dropped moderately on the week (200,000 bbl) as supplies tighten. Total inventory registers at 26.5 million bbl, which is the lowest levels seen on the West Coast in 2017 and two million bbl behind a year ago. Imports painted a bleak picture on the week; totaling 119,000 bbl compared the 375,000 bbl the week prior and below the year-ago level of 161,000 bbl. Tight supplies plus the huge rise in the number of visitors for the eclipse will inevitably drive up demand for fuel and prices.
The nation’s cheapest markets are South Carolina ($2.08) and Alabama ($2.10). For the third week in a row, there are no states with an average below $2.
Drivers are paying more to fill up compared to one year ago. The national average is currently 23 cents per gallon more and the Oregon average is 28 cents more than a year ago.
Oil Market Dynamics
Crude oil prices started this week falling 2.5 percent to their lowest close in three weeks. Investors are concerned about growing supplies from non-OPEC producers and that U.S. production will continue to add to the global crude glut. According to Baker Hughes, Inc. three oil rigs were added to the U.S. count last week, totaling 768, which is 372 rigs more than last year’s count at this time. At the same time, crude inventories have declined by more than 33 million bbl for seven consecutive weeks. The current crude oil storage level of 475.4 million bbl is the lowest since early October, and total inventories, when compared to the five-year average, have moved lower to just over 66 million bbl. The shrinking inventories have given the market greater confidence, but the growing rig count indicates that oil companies are still investing heavily in U.S. production.
Also, the U.S. Energy Information Administration last week published a report that pointed to a revised record gasoline demand at 9.842 million b/d for the week ended on July 28. The demand for the week ending August 4 noted a small pullback, but overall the last four weeks of gasoline demand have been on par with that of a year ago. The final monthly numbers for April and May pointed to record highs and final readings for June and July are likely to follow suit, confirming gasoline production by U.S. refiners and blenders has been running near record levels for the first seven months of 2017.
With strong gasoline production levels and seasonal demand staying on track, drivers will likely see prices continue to climb across the country. In fact, as OPEC seeks to re-double its efforts to rebalance the global oil market, any additional steps from it to curb growth in production may lead to higher oil prices. At a meeting in Abu Dhabi last week with OPEC and non-OPEC producers – all members of a pact that has agreed to cut production by 1.8 million barrels per day (bpd) until March 2018 – the group decided to take action, including curtailing exports, to comply more fully with the agreement. If those measures meet full success, higher pump prices will likely follow.
At the close of Friday’s formal trading session on the NYMEX, WTI increased 23 cents to settle at $48.82. At the close of Monday’s session, WTI fell $1.23 cents to close at $47.59. Today crude is trading around $47, compared to $49 a week ago. Crude prices are up about three percent in the last month and are about $8 per barrel higher 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 prices are also moving up. For the week, the national average adds a penny to $2.53 a gallon. Oregon’s average gains two cents to $2.70. A year ago the national average for diesel was $2.29 and the Oregon average was $2.51.
Find current fuel prices at GasPrices.AAA.com.
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