Pump prices continue to fall in the heart of the summer driving season. But the lower pump prices are not enticing drivers to fuel up. The seasonally low demand for gas along with declining crude oil prices are putting downward pressure on pump prices. For the week, the national average for regular slides 16 cents to $4.03 a gallon. The Oregon average loses 14 cents to $4.91.
The national average reached its record high of $5.016 on June 14 while the Oregon average reached its record high of $5.548 on June 15. Both averages have been steadily declining since then. The Oregon average fell below $5 last Friday (August 5); it rose above $5 a gallon for the first time on May 16.
“For now, it appears that Americans continue to drive less due to the elevated fuel prices. Couple that with lower crude oil prices and that should lead to continued declines at the pumps. The national average is now poised to fall below $4 a gallon this week for the first time since early March,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
A recent survey from AAA showed that Americans have changed their driving habits to cope with high gas prices. Almost two-thirds (64%) of U.S. adults have changed their driving habits or lifestyle since March, with 23% making “major changes.” Drivers’ top three changes to offs high gas prices are driving less, combining errands, and reducing shopping or dining out. Other changes include delaying major purchases, postponing vacations and saving less money.
Find complete results in the AAA consumer gas price survey news release.
The national and Oregon averages for regular gas have been falling since mid-June with this week marking the eighth consecutive week of declines. The major drivers of lower pump prices have been falling crude oil prices and a few weeks of seasonally low demand for gas.
Demand for gasoline in the U.S. dropped from 9.25 million b/d to 8.54 million b/d last week. The rate is 1.24 million b/d lower than last year and is in line with the need at the end of July 2020, when COVID-19 restrictions were in place and fewer drivers hit the road. Additionally, the total domestic gasoline supply rose slightly by 200,000 bbl to 225.3 million bbl. If gas demand remains low and the supply continues to increase alongside falling oil prices, drivers will likely continue to see pump prices drop.
Crude oil prices continue to fall due to fears of economic slowdowns elsewhere around the globe. Crude reached a recent high of $122.11 per barrel on June 8, and ranged from about $94 to $110 in July. This month, crude has fallen below $90 per barrel. Crude prices rose dramatically leading up to and in the first few months of Russia’s invasion of Ukraine. Russia is one of the world’s top oil producers and its involvement in a war causes market volatility. Also, tight global supplies put upward pressure on crude prices as demand for oil increased as pandemic restrictions eased. A year ago, crude was around $66 per barrel compared to $91 today.
Crude oil is the main ingredient in gasoline and diesel, so pump prices are impacted by crude prices on the global markets. On average, about 53% of what we pay for in a gallon of gasoline is for the price of crude oil, 12% is refining, 21% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.
Consumers can still enjoy a tasty AAA gas price–related treat courtesy of Krispy Kreme Doughnuts. Running every Wednesday through Labor Day, Krispy Kreme will lower the price of a dozen Original Glazed donuts to the national average that AAA reports each Monday. A dozen glazed doughnuts typically cost around $12. This Wednesday’s dozen should cost $4.06, not including sales tax, and is available only in shop, drive-thru, or online pickup.