La Grande – The national and Oregon averages for gasoline are falling for the 11th week in a row ahead of the Labor Day holiday. The major drivers continue to be lower crude oil prices and seasonally low demand for gas. For the week, the national average for regular slips a nickel to $3.84 a gallon. The Oregon average also loses a nickel to $4.78.
“Oregon Drivers will pay the most ever for gas over the Labor Day holiday weekend,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “The only other time that the Oregon average was above $4 a gallon for the holiday was in 2012 when the average on Labor Day was $4.02. Nationally, gas prices over Labor Day will be similar to 2012 when the Labor Day average was $3.83.”
While Memorial Day marks the unofficial start to the summer travel season, Labor Day marks the unofficial end. Although this will be a busy travel weekend compared to other weekends in August and September, travel volume over Labor Day is always significantly less than the other major summer holidays, Memorial Day and Independence Day. With many schools already back in session or starting soon, families tend to take shorter trips that are closer to home over Labor Day.
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 major drivers of lower pump prices have been falling crude oil prices and a few weeks of seasonally low demand for gas.
“Demand for gas in the U.S. has been seasonally low for a number of weeks this summer, likely because prices have remained elevated after climbing to record highs in June,” says Dodds.
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 offset 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.
Demand for gasoline in the U.S. tumbled from 9.35 million b/d to 8.43 million b/d last week, which is low for this time of year. Last year, demand was at 9.6 million b/d for the same period. Total domestic gasoline stocks decreased slightly by 47,000 bbl to 215.6 million bbl., according to the U.S. Energy Information Administration (EIA). Lower gasoline demand and steady supplies are helping to put downward pressure on gas prices; however, a bump in demand over the Labor Day holiday weekend has the potential to put some upward pressure on prices, especially in areas with high tourism.
Crude oil prices have tumbled from recent highs 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 ranged between about $87 and $97. 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, and sanctions imposed on Russia by the U.S. and other western nations resulted in tighter global oil supplies. Oil supplies were already tight around the world as demand for oil increased as pandemic restrictions eased. A year ago, crude was around $69 per barrel compared to $92 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 $3.85, not including sales tax, and is available only in shop, drive-thru, or online pickup.