Record Number of Holiday Travelers to pay Highest Pump Prices since 2014
PORTLAND, Ore., – Pump prices are edging lower as a record number of holiday travelers hit the road. For the week, the national average for regular unleaded falls four two cents to $2.42 a gallon while the Oregon average slips a penny to $2.79.
“Drivers are getting a little holiday present in the form of lower gas prices,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Pump prices are falling in most states due to increasing supplies.” Weekly gasoline inventories increased by a whopping 5.7 million bbl, according to the latest report from the U.S. Energy Information Administration (EIA). Demand is above the 9 million mark, which is in line with this time last year. “The increase in supply combined with weaker winter demand will pave the way for even cheaper winter gas prices,” added Dodds.
AAA projects a record-breaking holiday travel season with more than 107.4 million Americans (33 percent of the population) traveling for the Christmas and New Year holidays. This is the most on record and a 3.1 percent increase compared to last year. In Oregon, roughly 1.35 million will travel.
The vast majority—91 percent or 97.4 million people—will take a holiday road trip, an increase of 3 percent over last year. In Oregon, about 1.2 million will drive.
Gas prices are about 15 to 40 cents a gallon more than a year ago and the most expensive pump prices for the year-end holidays since 2014. However, pump prices are still relatively low compared to 2010 through 2013 when gas prices averaged more than $3 a gallon.
Oregon is one of 48 states and the District of Columbia where gas prices are lower week-over-week. The largest decrease is in Ohio (-11 cents). The only two states where prices increased week-over-week are Indiana (+2 cents) and Hawaii (+ 1 cent).
Oregon is one of 49 states and the District of Columbia where gas prices are lower now than a month ago. The national average is 12 cents less and the Oregon average is six cents less than a month ago. The largest monthly decreases are in Ohio (-32 cents) and Illinois (-22 cents). Hawaii (+6 cents) is the only state where prices climbed in the last month.
The West Coast still has the most expensive gas prices in the nation with six of the top ten markets in this region. Hawaii has the most expensive gasoline in the country, followed by Alaska and California. These states remain the only three with averages at or above $3 a gallon. Washington is fourth. Oregon is fifth most expensive for the 25th week in a row.
|Rank||Region||Price on 12/19/17|
|7||District of Columbia||$2.67|
According to EIA’s latest report for the region, gasoline inventories hit a new seven-month high at 30 million bbl. Refinery crude input rates climbed to 94 percent as the state increased gasoline production levels, helping to send regional gasoline inventories to their highest point this year.
The nation’s cheapest markets are Missouri ($2.16) and South Carolina ($2.18). For the 21st 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 18 cents more and the Oregon average is 38 cents more than a year ago. This is the fourth-largest yearly increase in the country. Alaska has the greatest year-over-year increase of 54 cents; California is second at 42 cents.
Oil Market Dynamics
Crude oil prices remain near $55 per barrel. Oil prices made slight gains throughout last week, and this trend may continue this week. However, investors may limit further gains on concerns about overproduction as the market attempts to rebalance the global glut of crude oil.
EIA’s latest report showed that domestic crude oil production hit a new record high at 9.8 million b/d, which has not been that high since December 1970. Increased oil production has given the market some pause, considering that all eyes were previously on rebalancing efforts led by OPEC and non-OPEC producers. After the cartel agreed to extend crude oil cuts through the end of 2018, efforts by the U.S. and other producers outside of the OPEC agreement came into sharper focus because they have gained market share due to reduced output levels from other global suppliers.
In spite of record production, U.S. crude oil inventories continue to decline, falling 5.1 million bbl last week, according to EIA. Inventories have fallen roughly 16 million bbl over the past four weeks. Moreover, Baker Hughes, Inc. reported that active oil rigs in the U.S. decreased by four last week and now stand at 747 in total.
Looking ahead to 2018, oil production from countries outside of OPEC’s agreement are likely to increase, based on the International Energy Agency’s (IEA) oil supply and demand forecast for 2018. According to IEA, the global oil surplus could be around 200,000 b/d in the first half of the year. On the other hand, growth in global oil demand is expected to hit 99.1 million b/d, but overall demand in 2018 is expected to be less than 2017 demand numbers. Reduced demand, while supplies continue to grow, will likely lead to another year of global inventory surplus.
At the close of Friday’s formal trading session on the NYMEX, WTI increased 26 cents to settle at $57.30 per barrel. At the close of Monday’s formal trading session, WTI fell 14 cents to settle at $57.16 per barrel. Today crude is trading around $57, compared to $56 a week ago. Crude prices are up about two percent in the last month and are about $5 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 ticks down a penny to $2.83 a gallon. Oregon’s average also falls a penny to $3.00. A year ago the national average for diesel was $2.45 and the Oregon average was $2.57.
Find current fuel prices at GasPrices.AAA.com.
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