Gas Prices Continue their Freefall due to Plummeting Demand

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Oregon Average Drops to three-year Low

PORTLAND, Ore., – Demand for gasoline in the U.S. has fallen to its lowest level since 1993 as Americans are urged to stay at home because of the coronavirus pandemic. Pump prices are falling in all 50 states. For the week, the national average for regular unleaded loses eight cents to $1.92 a gallon. The Oregon average also falls eight cents to $2.62.

Natl State Local Gas Prices 4-7-20

The national average is at its lowest price since January 2016, and the Oregon average is at its lowest price since March 2017.

Demand for gas in the U.S. has fallen to a 27-year low. The latest weekly report from the U.S. Energy Information Administration (EIA) puts demand at 6.7 million b/d – that’s the lowest point since 1993. “Gasoline demand is expected to remain low as the majority of states have stay-at-home orders. This will continue to put downward pressure on pump prices,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.

Crude oil prices started to increase at the end of last week; however this is not expected to have a major impact on gas prices in the short term because of the very low demand. Market analysts are also keeping an eye on refinery rates. The U.S. refinery utilization average is down to 82%, a low not seen since September 2017 in the wake of Hurricane Harvey. Given the drop in crude oil and gasoline demand, which is expected to push even lower, refineries are reducing production in hopes this could help to balance the amount of gasoline supply in the country.

Pump prices are lower this week in Oregon and all 50 states and the District of Columbia. Idaho (-15 cents) has the largest weekly drop while the District of Columbia (-2 cents) has the smallest.

This week there’s only one state, Hawaii, with an average at or above $3 a gallon. California has dropped below the $3 mark.

The cheapest gas in the nation can be found in Wisconsin ($1.42) and Oklahoma ($1.47). This is the fourth week in a row that one or more states has an average below $2 a gallon. In all, 33 states are below that benchmark.

Oregon is one of all 50 states and the District of Columbia with lower prices now than a month ago. The national average is 48 cents less and the Oregon average is 36 cents less than a month ago. Wisconsin (-86 cents) has the largest month-over-month decline. Hawaii (-25 cents) has the smallest.

Oregon is one of 50 states and the District of Columbia where drivers are paying less than a year ago. The national average is 82 cents less and the Oregon average is 54 cents less than a year ago. Wisconsin (-$1.32) has the largest year-over-year drop. Hawaii (-20 cents) has the smallest.

A reminder that Oregonians can temporarily pump their own gas due to the coronavirus outbreak. Oregon State Fire Marshall Jim Walker made the announcement in a news release. Stations aren’t required to offer self-serve gas, but it is allowed until Aril 11 in order to reduce contact that could spread COVID-19, and ensure essential workers have access to fuel during potential staffing shortages at gas stations. https://www.oregon.gov/osp/Docs/SelfServeRuleChangePressReleaseMarch282020.pdf

 

West Coast

Although the West Coast region continues to have the most expensive state averages in the country, it is also seeing big weekly drops.

Rank Region Price on 4/7/2020
1 Hawaii $3.31
2 California $2.95
3 Washington $2.67
4 Oregon $2.62
5 Nevada $2.55
6 Alaska $2.40
7 Arizona $2.36
8 New York $2.29
9 Utah $2.26
10 District of Columbia $2.24

Hawaii is most expensive for the 17th week in a row and as mentioned above is now the only state in the nation with an average at or above $3 a gallon.  California, Washington, Oregon, Nevada, Alaska, and Arizona round out the top seven. Oregon is fourth most expensive for the 10th week in a row.

Alaska (-10 cents) has the biggest decline in the region while Hawaii (-5 cents) has the smallest.

According to EIA’s latest weekly report, total gas stocks in the region increased from 30.97 million bbl to 34.06 million bbl last week. The significant increase in supply, alongside low crude prices and demand, will likely help to push pump prices lower in the region this week.

 

Oil market dynamics

Domestic crude prices increased at the end of last week, then fell to start this week. Prices rose following news that the Organization of the Petroleum Exporting Countries (OPEC) and its partners, including Russia, planned to hold an emergency meeting yesterday to discuss potential crude production cuts amid the global oversupply caused by COVID-19. However, OPEC and its partners have moved the meeting to this Thursday, April 9. Crude prices are likely to remain volatile this week until the meeting, where the market will be looking to see if production cuts are enacted and if they are drastic enough to curb the growing oversupply of crude in the global market.

At the end of Friday’s formal trading session, WTI increased by $3.02 to settle at $28.34 per barrel. At the close of Monday’s formal trading session on the NYMEX, WTI fell $2.26 to $26.08. Today crude is trading around $26 compared to $20 a week ago. Crude prices are down about 14 percent in the last month and are about $37 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.

National Comparison Gas Prices 4-7-20

Diesel

For the week, the national average falls four cents to $2.56 a gallon. Oregon’s average loses six cents to $2.81. A year ago the national average for diesel was $3.04 and the Oregon average was $3.16.

 

Find current fuel prices at GasPrices.AAA.com.

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Find local news releases at https://www.oregon.aaa.com/category/news-releases/

Fuel prices are updated daily at AAA’s Daily Fuel Gauge at AAA Gas Prices. For more info go www.AAA.com.  AAA Oregon/Idaho provides more than 820,000 members with travel, insurance, financial and automotive-related services, and is an affiliate of AAA National, serving more than 60 million motorists in North America.