Enjoy the cheaper gas while it lasts, experts say

PORTLAND, Ore. (KGW) — Oregonians are currently enjoying relatively cheap gas following several lengthy stretches of painfully high costs earlier this year. Prices will probably stay low for at least a few more weeks, but people hoping to see the trend continue through the rest of the new year are likely to be disappointed.

The pricing slowdown is mostly driven by reduced demand, according to AAA Idaho spokesman Matthew Conde, in keeping with a seasonal trend that typically makes January the cheapest time at the pump.

“We’ve seen the cold weather, we’ve seen inflation, we’ve seen some things that have kind of stymied day-to-day stuff,” he said. “Yes, the big travel still happened over the holiday. But the day-to-day stuff, people are sort of cinching their belts on.”

Unfortunately, that means the relief is temporary — the same seasonal trends also show that gas prices will likely rebound in the spring as drivers hit the road and fill up more often. At that point, relief would need to come from the supply side, and there’s no indication that it’s forthcoming.

“We haven’t really solved a lot of the supply side issues right now,” Conde said. “OPEC, of course, is still in the middle of large production cuts. Obviously Russian fuel not available anywhere, that’s affected the global market as well.”

Those same supply issues were behind a lot of the price spikes in 2022, starting with a large jump following Russia’s invasion of Ukraine in the spring. There was some relief when the price of crude oil fell in the summer, but then another spike in gas prices arrived in the fall.

The price of crude oil is still nearly $80 per barrel, Conde said, and crude oil costs determine about 50-60% of the price of finished gasoline. There’s still a lot of uncertainty in the crude oil market, he added.

“Certainly in this situation where the spigot is largely turned off on Russian oil, everybody knows it, and so there is a degree of understanding,” he said. “But I wouldn’t say that that necessarily leads to stability.”

Oregon prices lower

For the moment, at least, Oregon gas prices are still trending downward. The state’s average price per gallon of regular gas was $3.75 as of Thursday, according to AAA’s price map, down from $4.42 per gallon a month ago.

Portland’s average is slightly higher at $3.87 per gallon, but that’s down from $4.52 per gallon a month ago. The national average is $3.16, down from $3.52 a month ago.

Those prices are likely to hold for the next thee or four weeks, and Conde said he thinks it’s possible that the national average could even dip below $3 per gallon and Oregon’s average could dip below $3.50 during that time period.

“But with that comes the potential right back during the heart of driving season to be looking at $4.50, maybe even $5,” he said, although he added that it’s too soon to know for sure what will happen.

One thing that’s unlikely to change no matter which way the prices trend this year: gas in Oregon is inevitably going to be more expensive than the national average. That’s mostly down to geography — the west coast’s gas has to be trucked farther — but there’s also a lingering pandemic impact.

“A lot of those tanker trucks sat idle, those workers weren’t needed. A lot of them went into e-commerce and other parts of the industry. And so there’s been a little bit of a hiring shortage,” Conde said. “Some of that has been remedied, but you’re still looking at a very strained market as far as the tanker trucks just getting places and making all these deliveries.”

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