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Mar-10-2009 12:15printcomments

Crude Prices Jump, but Gas Prices Hold Fairly Steady

Oregon's average for regular unleaded drops half a cent to $2.06 this week.

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Salem-News.com

(PORTLAND, Ore.) - The price of crude oil reached its highest price in about two months this week, but drivers are not seeing any dramatic swings in gas prices.

Oregon's average for regular unleaded drops half a cent in the past week to $2.06, while the national average gains a penny to $1.94.

AAA Oregon Public Affairs Director Marie Dodds says, "Crude oil closed at $47.16 a barrel Monday, after comments from China that it is considering purchasing strategic assets such as oil and gold with some of its nearly $2 trillion in foreign-exchange."

"The news came in the form of an editorial by the head of China's energy ministry and was published in a paper owned by the government. China is one of the world's largest buyers of U.S. government debt, so the possibility of a move by that nation into other asset classes has the ability to move markets world-wide."

Also helping to push crude prices higher is news that OPEC may agree to additional production cuts when it meets on March 15. OPEC says it has already cut production by more than 4 million barrels a day since last September.

However, the Cartel does not always follow through with production cuts as some member nations still want to raise more revenues. Earlier this month, Iran said it would not support a reduction in oil output.

Crude oil today is trading around $46 per barrel. Prices have remained between about $33 and $48 per barrel since December.

Dodds says, "interestingly, some global security issues, including a planned missile launch by North Korea, a near skirmish between the U.S. and Chinese Navies, more reports that Iran is closer to achieving a nuclear weapon, and the election of a harder-line regime in Israel have not been able to rattle the oil markets as they have in the past. Instead, the market seems to be waiting for the return of increased consumption by American drivers."

Gas prices will likely continue to increase as we head into the spring and summer months. AAA believes we could see a national average between $2 and $2.25 a gallon, with higher prices here on the west coast because of growing seasonal demand and the additional cost of producing the summer blends of gasoline.

Current pump prices are well below last year's prices when Oregon's average was $3.42 and the national average was $3.22.

Salem has the best average price on gas with $2.038. Portland's cost of $2.049 a gallon follows closely. Motorists in the Eugene/Springfield area are paying an average of $2.068. The average price for a gallon of regular in Medford/Ashland is $2.115. Drivers in the Vancouver, Washington are are paying an average of $2.148 for self-serve regular.

Twelve states have averages for regular unleaded at or above $2 a gallon, up from eleven last week. The most expensive gas in the country for the 37th week in a row is Alaska at $2.52, followed by Hawaii at $2.45, California at $2.20, Washington at $2.17 (same as last week) and Nevada at $2.17.

Oregon's gas prices are seventh highest, the same as last week. Wyoming has the least expensive gas this week with regular unleaded at $1.74 a gallon.

Diesel prices continue to decline. The national average decreases four cents to $2.17, while Oregon’s average drops eight cents to $2.28. Hawaii has the highest statewide average price for diesel again this week at $3.85, followed by Alaska at $3.45, District of Columbia at $2.73, New York at $2.66, and Connecticut at $2.63. Oregon's average diesel price is 13th most expensive, down from 12th last week. Washington's diesel price drops seven cents to $2.32 and is 11th highest, same as last week. A year ago, the national average for diesel was $3.83 and Oregon's average was $3.81.

Source: Oregon AAA




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