PORTLAND, Ore., – The cost of a barrel of oil remains about $120 per barrel, nearly double last August’s price, as increased demand for oil outpaces the tight global supply. Despite record high gas prices, demand for gasoline in the U.S. remains strong as the summer driving season ramps up.
As a result, pump prices are up in all 50 states, and nearly half of all states have averaged at or above $5 a gallon. For the week, the national average for regular jumps 10 cents to $5.02 a gallon. The Oregon average climbs eight cents to $5.54. These are both at record highs; in fact, new record highs continue to be set almost daily.
“The skyrocketing pump prices have not caused demand for gas to drop. If prices remain above $5, we may start to see demand destruction if people change their daily driving habits, but it hasn’t happened yet. People seem eager to drive and take summer vacations after staying close to home for two years during the pandemic,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
All 50 states have averages above $4 a gallon and 21 states, including Oregon, and the District of Columbia have averages above $5. California remains the only state with an average above $6. The national and Oregon averages continue to set new record highs almost daily.
Crude oil prices are climbing because demand outpaces the tight global supply. Higher crude oil prices result in higher pump prices since oil is the main ingredient in gasoline and diesel. 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. A year ago, crude was around $64 per barrel compared to $118 today.
Demand for gasoline in the U.S. grew from 8.98 million b/d to 9.2 million b/d as drivers continue to fuel up for the summer driving season, typically a time when gas demand increases. Total domestic gasoline stocks decreased by 800,000 bbl to 218.2 million bbl last week according to the U.S. Energy Information Administration (EIA).
This dynamic between decreased supply and increased demand is contributing to rising prices at the pump. Coupled with increasing crude oil prices, this means that the price of gas will likely remain elevated for the near future.
But on the bright side, consumers will once again 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 $5.01, not including sales tax, and is available only in shop, drive-thru, or online pickup.