Pump prices are climbing in many states in the wake of Hurricane Laura which hammered the Gulf Coast last week, and also due to an increase in demand to one of the highest measurements of the year as the Labor Day holiday approaches. For the week, the national average jumps four cents to $2.23 a gallon. The Oregon average holds steady at $2.67.
Drivers will pay the cheapest prices for gas over the Labor Day holiday in four years. In 2016, the national average was $2.20 and the Oregon average was $2.46 on Labor Day.
Demand for gasoline is at its highest mark of the summer but remains below year-ago levels. The U.S. Information Administration (EIA) reports that gas demand increased from 8.63 million b/d to 9.16 million b/d. This is 739,000 b/d lower than the rate last year at this time. Moreover, total domestic gasoline supplies decreased by 4.6 million bbl last week to 239.2 million bbl, but the current level is 7.2 million bbl higher than the level at this time last year.
“We often see regional increases in demand and more expensive gas prices ahead of a storm, especially a hurricane that threatens rigs and refineries in the Gulf of Mexico. Demand is also up as travelers take to the roads for a late summer getaway. With Labor Day this weekend, the vast majority of travelers will go by car. Auto travel has been the most popular way to go during the coronavirus pandemic,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “AAA expects gas prices will again push cheaper in the coming weeks as demand drops off in the fall and facilities in the Gulf start up again.”
Demand will likely remain relatively robust leading up to the Labor Day holiday as people take road trips to mark the unofficial end of the summer. AAA says a whopping 97 percent of people who are traveling this summer are going by car, and most are visiting destinations that are fairly close — about a day’s drive — from home.
Oregon is one of 10 states where prices changed by less than a penny in the last week. West Virginia (+13 cents) has the largest weekly increase. Michigan (-3 cents) has the largest week-over-week decrease.
For the 12th week in a row, California ($3.24) and Hawaii ($3.23) 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 ($1.89) and Louisiana ($1.91).
This is the 24th week in a row that one or more states has an average below $2 a gallon. In all, eight states are below that benchmark, down from 11 a week ago.
Oregon is one of six states where prices are basically the same as a month ago (within a cent of the month-ago average). The national average is a nickel more and the Oregon average is a penny more than a month ago. This is the second-smallest month-over-month increase in the nation. North Carolina (+15 cents) has the largest monthly increase in the country. Colorado (-7 cents) has the biggest month-over-month decline.
All 50 states and the District of Columbia have lower prices now than a year ago. The national average 35 cents less and the Oregon average is 38 cents less than a year ago. This is the 21st-largest yearly drop in the nation. Connecticut (-51 cents) has the largest year-over-year decline. Delaware (-4 cents) has the smallest.
Oil market dynamics
Crude prices moved higher for much of last week as Laura reduced crude production in the Gulf of Mexico. For this week, crude prices may rise again due to a weak U.S. dollar and if prolonged closure of rigs and production platforms tighten domestic crude inventories amid rising demand. However, EIA’s latest weekly report revealed that total domestic crude inventories, currently sitting at 507.8 million bbl, are 80 million bbl higher than where they were during this time in August 2019. The higher level could play a role in stabilizing crude prices.
At the end of Friday’s formal trading session, WTI decreased by seven cents to settle at $42.97 per barrel. At the end of Monday’s formal trading session, WTI fell 36 cents to settle at $42.61 per barrel. Today crude is trading around $43, same as a week ago. Crude prices are up about six percent in the last month and are about $12 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 a penny to $2.43 a gallon. Oregon’s average adds a penny to $2.63. A year ago the national average for diesel was $2.93 and the Oregon average was $3.13.