Still, year-end pump prices to be most expensive in three years
PORTLAND, Ore., – Pump prices are ticking down as November comes to an end but remain at three-year highs. For the week, the national average for regular unleaded slips three cents to $2.50 a gallon while the Oregon average dips a penny to $2.84. Prices have dropped between one and 14 cents a gallon in most U.S. markets this week.
“AAA expects to see gas prices move lower between now and the end of December, decreasing by five to 20 cents a gallon for most drivers before the start of the new year. Still, drivers will pay the highest November and December gas prices since 2014,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Pump prices have simply not followed typical trends this year due to the impact of two major hurricanes, robust demand through the fall and continued growth in gasoline exports.”
Historically, gas prices tend to decline during the fall once the summer driving season comes to an end and as the seasonal switch takes place in mid-September from summer-blend gasoline to the cheaper winter-blend gas.
Drivers can find gas for $2.50 or less at 63 percent of gas stations nationwide. In Oregon, only a handful of gas stations are selling gas below $2.50. Five percent of Oregon stations are currently selling gasoline for $3 or more per gallon, 71 percent of Oregon stations are selling gas for $2.75 or more, and 98 percent are selling gas for $2.50 or more per gallon.
Oregon is one of 48 states and the District of Columbia where gas prices are lower week-over-week. The largest decreases are in Indiana (-14 cents) and Ohio (-12 cents). Hawaii (+1 cent) and Utah (+ ½ cent) are the only two states to see prices increase on the week.
Oregon is one of 40 states and the District of Columbia where gas prices have risen in the last month. The largest monthly increases are in Alaska (+20 cents) and California (+15 cents). The national average is four cents more and the Oregon average is nine cents more than a month ago. The largest monthly decrease is in Indiana (-14 cents).
The West Coast still has the most expensive gas prices in the nation with six of the top ten markets in this region. Alaska has the most expensive gasoline in the country for the second week in a row, followed by Hawaii and California. These three states all have averages at or above $3 a gallon. Washington is fourth. Oregon is fifth most expensive for the 22nd week in a row.
|Rank||Region||Price on 11/28/17|
|7||District of Columbia||$2.74|
After a few weeks of slow growth and declining refinery rates, the West Coast’s refinery utilization rate jumped above 86 percent last week – a rate higher than last year’s at this time. Demand has remained stronger than expected for the early part of fall, so an increasing utilization rate will close the supply gap and help keep stocks in check as winter draws closer. This region will likely see some of the largest drops in the country in the month ahead.
The nation’s cheapest markets are Alabama ($2.23) and South Carolina ($2.24). For the 18th week in a row, no states have an average below $2.
Drivers are paying more than a year ago to fill up. The national average is 37 cents more and the Oregon average is 42 cents more than a year ago.
Oil Market Dynamics
West Texas Intermediate closed last week at a multi-year high near $59 per barrel, the highest price since June 2015. Expectations for an extension of the current OPEC and Russian production cut until December 31, 2018 fueled this spike. OPEC and non-OPEC members of the production reduction agreement will meet in Vienna on November 30, to discuss the fate of the agreement, which is currently set to expire in March 2018. Market observers have been awaiting this meeting to see if agreement participants will take additional measures to restrict supply in the global market, which could push oil prices even higher.
Increased oil production and exports from countries outside of the agreement, including the U.S., have acted as a counterforce to the agreement’s intended market impact. In fact, Baker Hughes, Inc. reported that the active U.S. oil rig count grew by nine last week, with the total now at 747. Moreover, oil production in the U.S. reached 9.7 million b/d last week, according to EIA’s latest report, a high not seen since April 1971. With the U.S. gaining a stronger foothold in the market, OPEC’s announcement following this week’s meeting will be heavily assessed for its potential impact on the market in 2018 and beyond.
At the close of Friday’s formal trading session on the NYMEX, WTI increased 90 cents to settle at $58.95 per barrel. At the close of Monday’s formal trading session, WTI lost 84 cents to settle at $58.11 per barrel. Today crude is trading around $58 compared to $57 a week ago. Crude prices are up about seven percent in the last month and are about $12 more per barrel 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.
For the week, the national average remains at $2.85 a gallon. Oregon’s average gains a penny to $3.03. A year ago the national average for diesel was $2.38 and the Oregon average was $2.55.
Find current fuel prices at GasPrices.AAA.com.
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