Falling Pump Prices on West Coast Mean Little for Oregonians

Gas prices are finally easing on the west coast, but California, Washington and Oregon all rank in the top five most expensive states for gas for the second week in a row.

Salem-News.com

(PORTLAND, Ore.) - Gas prices on the West Coast are finally easing a bit, Oregon AAA says. The state's average for regular unleaded falls a penny this week to $2.88 while the national average loses two cents to $2.54.

AAA Oregon Public Affairs Director Marie Dodds says, "California, Washington and Oregon are all in the top five states for the most expensive gas in the country for the second week in a row, but there does seem to be some price softening in several West Coast cities. It's doubtful prices in our area will drop below the national average, but the gap should narrow now that the peak summer driving season is behind us."

One factor impacting gas prices in the west and elsewhere is the annual conversion from summer blended fuels to winter blends, which can slow refinery production and cause some regional price spikes.

Crude oil is trading around $71 a barrel today, compared to about $70 a week ago. Oil prices have more than doubled since falling to about $33 per barrel last December. But crude was not able to sustain a one-year-high of $75 reached last month because of concerns prices may have risen faster than the recovering global economy could support.

A report by the London-based Centre for Global Energy Studies illustrates this relationship between the economy and fuel prices. The report suggests climbing oil prices are unlikely until a global economic recovery is well underway. Although there has been positive economic news lately, it doesn't appear the economy will recover rapidly. Investors are also concerned about weak demand in several international markets, namely China, the world's second largest energy consumer. That said, it still is reasonable to expect slightly higher market oil prices by the end of 2009 when we look at how much oil prices have already increased this year.

One development to watch this week is the G20 Summit in Pittsburgh this Thursday and Friday. Leaders from 20 industrialized and developing countries will discuss the global financial crisis. The meeting's tone may provide insight as to how leaders feel about the prospects for economic recovery and the future of oil and gas prices.

Oregon's statewide average for a gallon of regular gas is $2.879. Portland's $2.845 is the best price in Oregon according to AAA, with Salem coming in second, with an average price of $2.851. Drivers in the Eugene/Springfield are seeing an average of $2.877 at the pumps, and Medford/Ashland residents are paying an average of $2.985. Motorists in the Vancouver, Washington area are paying an average of $2.927 for self-serve regular.

Three states have averages for regular unleaded at or above $3 a gallon, same as last week. Alaska has the most expensive gas in the nation again this week with regular unleaded at $3.40, followed by Hawaii at $3.37, California at $3.15, Washington at $2.97 (down a penny from last week and 4th most expensive for the 15th consecutive week) and Oregon at $2.88 (5th most expensive for the second week in a row). Missouri is least expensive again this week at $2.25.

Diesel prices are holding fairly steady this week. The national average drops a penny to $2.66, while Oregon’s average gains half a cent to $2.85. Hawaii has the highest statewide average price for diesel again this week at $3.89, followed by Alaska at $3.55, Washington at $3.00 (same price as last week and third highest for the second week in a row), California at $2.94 and New York at $2.88. Oregon's average diesel price is 7th, up from 8th last week. A year ago, the national average for diesel was $4.11 and Oregon's average was $4.07.

Source: Oregon AAA