Thursday, October 23, 2014

A combination of higher crude prices, refinery shut downs and speculation have sent gas prices soaring earlier than usual this winter, but the rate of increase has slowed down a bit this week.  The national average for regular unleaded jumps seven cents this week, compared to a 17-cent spike last week, to $3.60.  For the third week in a row, Oregon's average remains below the national average, adding six cents this week, compared to a 16.5-cent jump last week, to $3.57.

 

Gas prices are the highest on record for this calendar day.  The national average has exceeded the previous highs set last year and has now set a new daily record for the past 13 days in a row.  The Oregon average has set a new daily record for the past eight consecutive days.

The national average has increased for 25 consecutive days, which is the longest streak since February and March 2012.  This price surge is largely the result of higher crude oil prices, regional refinery issues and the switch from the cheaper winter-blend gasoline to the cleaner burning but more expensive summer-blend fuel.

Speculation is also playing a role in sending pump prices higher as more traders expect oil prices to rise in the coming months than to fall.  The rally began in mid-January.  According to last Friday's Commodity Futures Trading Commission report, hedge funds, commodity pools and other investors have thrown close to $12.5 billion into a collective bet that gasoline prices will rise, closing in on the highest level ever of $13 billion, set last March.

For the 13th week in a row, both Oregon and Washington remain out of the ten most expensive states.  Hawaii is most expensive at $4.24, and California is second at $4.06.  They are the only two states where gasoline is at or above $4 a gallon.

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