Significant Jump in Gas Demand sends Prices Higher ahead of Independence Day holiday
PORTLAND, Ore., – Demand for gasoline in the U.S. jumped 10 percent for the week helping to push pump prices higher in all 50 states. For the week, the national average for regular adds four cents to $2.18 a gallon. The Oregon average edges up a penny to $2.59. This is the smallest weekly increase in the nation.
Gasoline demand increased from 7.8 million bbl to 8.6 million bbl. While the demand rate is much lower than a typical summer reading, it’s the highest recorded since late March and indicates Americans are driving and filling up more. Many states including Oregon are in phases of reopening after the coronavirus pandemic put much of the country under stay-at-home orders to help stop the spread of COVID-19. Some states now are starting to reimpose restrictions as cases of COVID-19 are surging in some areas. Visit AAA.com/covidmap for an interactive map with the latest travel restrictions and policies for North America.
“The spike in gasoline demand is putting upward pressure on pump prices here in Oregon and across the country,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “While AAA expects gas prices will continue to increase ahead of the Independence Day holiday weekend, pump prices are still 50 to 60 cents a gallon less than last year’s holiday.”
AAA has released third-quarter travel projections and says Americans will take 700 million trips between July and September, a drop of 15 percent compared to last year and the first decline in summer travel since 2009. Here in the Pacific Region (AK, CA, HI, OR, WA), residents will take 107 million trips, a drop of 17 percent compared to 2019.
Car trips are the most popular way to go with a whopping 97 percent of travelers choosing to drive to their destinations. Find details in the AAA summer travel projections news release.
Here in Oregon, traffic volumes are steadily increasing. The most recent traffic volume report (June 26, 2020) from the Oregon Department of Transportation shows the most recent full week saw an average reduction of 16 percent in weekday traffic volumes and a 19 percent reduction in weekend volumes overall compared to the previous year. For the month of April, traffic began with 43 percent lower weekday volumes and 55 percent lower weekend volumes than 2019. https://www.oregon.gov/odot/Data/Documents/ODOT_TrafficReport_June26_2020.pdf
All 50 states and the District of Columbia have higher prices now than a week ago but all of the increases are fairly moderate. Michigan (+8 cents) and Indiana (+7 cents) have the largest weekly increases and are among six states with weekly increases greater than a nickel. As mentioned above, Oregon (+1 cent) has the smallest weekly increase in the nation.
For the third week in a row, Hawaii ($3.20) and California ($3.07) are the only two states in the nation with an average at or above $3 a gallon.
The cheapest gas in the nation can be found in Mississippi ($1.82) and Louisiana ($1.84). This is the 16th week in a row that one or more states has an average below $2 a gallon. In all, 12 states are below that benchmark, down from 13 a week ago.
All 50 states and the District of Columbia have higher prices now than a month ago. The national average is 20 cents and the Oregon average is 14 cents more than a month ago. This is the 45th-largest monthly increase in the country. Colorado (+39 cents) has the largest month-over-month increase while Hawaii (+3 cents) has the smallest.
All 50 states and the District of Columbia have lower prices now than a year ago. The national average is 54 cents less and the Oregon average is 63 cents less than a year ago. This is the 9th-largest yearly drop in the nation. Alaska (-78 cents) has the largest year-over-year drop. Colorado (-26 cents) has the smallest.
The West Coast region continues to have the most expensive pump prices in the nation with every state in the region except Arizona in the top 10. Prices likely are poised for more increases ahead of the holiday weekend.
Hawaii is most expensive for the 29th week in a row. As mentioned above, Hawaii and California are the only two states in the nation with an average at or above $3 a gallon. Washington, Nevada, Oregon, and Alaska round out the top 6. Arizona is 11th. Oregon is fifth most expensive for the second week in a row.
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Arizona (+4 cents) has the largest weekly increase in the region. Oregon (+1 cent) has the smallest week-over-week increase in the region and in the nation.
According to EIA’s latest weekly report, total gas stocks in the region increased slightly from 30.1 million bbl to 30.2 million bbl last week. Increasing stocks, alongside increasing demand, may help to slow pump price increases this week in the region.
Oil market dynamics
Domestic crude prices pushed cheaper last week due to an increase in new coronavirus infections worldwide, which could suppress crude demand if stay at home orders increase. For this week, crude prices rebounded on Monday but could continue to decline if the market continues to worry that efforts to stimulate the global economy will falter because of uncontained outbreaks.
At the end of Friday’s formal trading session, WTI decreased by 23 cents to settle at $38.49 per barrel. At the end of Monday’s formal trading session, WTI added $1.21 to settle at $39.70 per barrel. Today crude is trading around $40 compared to $41 a week ago. Crude prices are up about 11 percent in the last month and are about $19 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.
For the week, the national average ticks up half a cent to $2.44 a gallon. Oregon’s average adds a penny to $2.61. A year ago the national average for diesel was just under $3.00 and the Oregon average was $3.21.
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/