At last, it doesn’t feel like a trip to the gas station requires a payday loan.
The average price in Vancouver dropped by 17 cents in the past week to $4.10, AAA Oregon/Idaho reported, as the high fever in West Coast gas prices finally broke. Oregon’s average price dropped by 13 cents, also to $4.10, while the national average fell three cents to $3.54.
AAA expects West Coast prices to continue dropping as they at least partially close the gap with the U.S. average. Nationally, gas prices have fallen for 55 of the last 57 days, but AAA said that a tiny overnight increase could be a sign that the national average could finally be leveling out.
The auto club’s analysis of the reason behind the falling local prices is no surprise: the reopening of the Cherry Point refinery, the largest in the state, and the return to production of several California refineries that were shut for maintenance and other issues. The Cherry Point refinery near Blaine had been mostly closed since it was damaged by a fire in February.
In the bigger picture, falling crude prices have brought relief to the pumps. Crude prices have fallen more than $20 per barrel since the beginning of May, including a $1 drop in the past week. Crude is now trading around $83 per barrel, AAA said. As a general rule of thumb, a $1 per barrel decline in crude oil prices results in a decline in gas prices of about 2.5 cents per gallon, AAA said.
The recent spike in price has been greeted with a spike in skepticism by some analysts and politicians. Last week, Sen. Maria Cantwell, D-Wash., asked the Federal Trade Commission to investigate refinery operators Alon, Chevron, ConocoPhillips, Shell, Tesoro and BP about the dramatic price increases, McClatchy News reported.
In her letter to the FTC, Cantwell said the Cherry Point fire shouldn’t have led to record-low inventory levels “unless other West Coast refiners failed to undertake actions that could have made up for the supply shortage resulting from the Cherry Point accident. The reasons why six other West Coast refiners simultaneously reduced operations are not well documented.”
She cited a report by Portland-based McCullough Research that questioned whether the historically low gasoline inventories on the West Coast were really a result of the Cherry Point fire. Research by the report’s author, Robert McCullough, implies that supply was withheld from the market to keep prices inflated, the McClatchy article said.
The Western States Petroleum Association — a Sacramento, Calif.-based trade association for energy companies on the West Coast — denied those allegations.
The U.S. price peak for the year was set on April 6, at $3.94 per gallon, according to AAA. Oregon’s peak so far is $4.27 on June 1, barely below the all-time high of $4.29 per gallon set on July 3, 2008.
Currently, Hawaii, at $4.47 per gallon, is the most expensive place to buy gas, while South Carolina, has the cheapest gas at $3.12 a gallon, AAA said. Washington, Oregon, and California all remain among the nation’s top five most expensive states for gasoline, all with averages above $4 per gallon.