Drivers can expect volatility at the pumps in the coming days and weeks.
AAA says gas prices could jump 10 to 25 cents a gallon over the next month in the wake of drone attacks on two major facilities in Saudi Arabia.
For the week, the national average for regular jumps three cents to $2.59 a gallon. The Oregon average holds steady at $3.05.
Over the weekend, the drone attack hit two major oil facilities in Saudi Arabia, including the world’s largest, Abqaig. The attacks have taken 5.7 million barrels of crude per day off the market, accounting for about six percent of the global supply. Damage to the facilities is still being accessed.
“Drivers can expect pump prices to rise this week... The total jump could be 10 to 25 cents in the next month or so,” said Marie Dodds, public affairs director for AAA Oregon/Idaho. “Whether this is a short- or long-term trend will be determined by crude oil prices and how quickly the facilities in Saudi Arabia are repaired.”
President Donald Trump said he has authorized the release of crude from the Strategic Petroleum Reserve. Other countries that consumer oil from Saudi Arabia also have emergency reserves to help back-fill the global loss, if needed.
The U.S. imports much less crude oil from Saudi Arabia than it used to. The latest report from the U.S. Energy Information Administration (EIA) shows that the U.S. imported the least amount of crude oil from Saudi this decade. In the first half of this year, on average the U.S. imported about 18,000 bbl compared to 35,600 bbl in the first half of 2017.
The U.S. also has robust gasoline stocks. While stock levels have been decreasing the past few weeks, total domestic stocks sit at 228 million bbl, which is ahead of the five-year average for this time of year by several million barrels.
Oregon is one three states where pump prices are holding steady this week. Prices climbed in 35 states and the District of Columbia. Ohio (+16 cents) has the largest weekly increase. Idaho (-1.5 cents) has the largest weekly drop. This week there are five states with an average above $3 a gallon, same as a week ago.
Oregon is one of 42 states and the District of Columbia with lower prices now than a month ago. The national average is four cents less and the Oregon average is also four cents less than a month ago. This is the 35th-largest monthly decline in the nation. New Jersey (-14 cents) has the largest month-over-month decline. Colorado (+6 cents) has the largest month-over-month increase.
Oregon is one of 49 states and the District of Columbia where drivers are paying less than a year ago. The national average is 25 cents less and the Oregon average is 21 cents less than a year ago. Idaho (-45 cents) has the largest year-over-year drop.
The West Coast continues to have the highest pump prices in the nation with all of the region’s states landing on the top 10 most expensive list.
Hawaii is most expensive for the sixth week in a row with California, Washington, Nevada, Oregon, Alaska and Arizona rounding out the top seven. Oregon is fifth most expensive for the ninth week in a row.
The EIA’s recent report for the week ending on September 9, showed that total West Coast motor gasoline stocks climbed by 300,000 bbl to 28.7 million bbl. The increase is a reversal from the previous four-week period that saw total stockpiles decrease by about 3.5 million bbl. The stock growth will likely help pump prices continue to decline as motorists in the region enter the lower demand fall driving season this week. However, as with the rest of the nation, increasing crude oil prices are likely to reverse this trend.
The cheapest gas in the nation can be found in Mississippi ($2.22) and Louisiana ($2.22). For the 31st week in a row, no states have an average below $2 a gallon.
Oil market dynamics
Crude oil prices skyrocketed on Monday in response to the attacks in Saudi Arabia. West Texas Intermediate (WTI) jumped 15.5 percent, the largest increase since December 2008 and closed near $63 per barrel, the highest price since last May. Prices have settled down in today’s trading. This week, expect more volatility in crude prices as the market reacts to news out of Saudi Arabia. Prices could also be bolstered by increased optimism that China and the U.S., the world’s two largest crude consumers, may be nearing a resolution to the trade war.
At the close of Friday’s formal trading session on the NYMEX, WTI decreased by 24 cents to settle at $54.85. At the close of Monday’s formal trading session on the NYMEX, WTI gained $8.05 to close at $62.90. Today crude is trading around $60, compared to $58 a week ago. Crude prices are up about six percent in the last month and are about $6 per barrel 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.
For the week, the national average adds two cents to $2.94 a gallon. Oregon’s average gains a penny to $3.13. A year ago the national average for diesel was $3.19 and the Oregon average was $3.38.