December 2017 Fuel Price Update for Oregon
Diesel and gasoline prices continue to stay up for the Portland, Oregon and Vancouver, Washington market. Plan for higher fuel prices in 2018. If you are looking to budget, Star Oilco’s guess is a $.50 a gallon higher in 2018 than 2017 for your budget.
According to the Oil Price Information Service in it’s “Year End Oil Market Trends to Watch” do not expect high oil prices indefinitely, but it will take three or four quarters for the crude oil market to “rebalance” itself down to traditional prices.
AAA Gas prices reports that this December will see the highest retail pump prices since 2014 as we finish the year. So as obvious as the price at the pump, gas and diesel are more expensive.
Fuel prices have stabilized on the high end of recent history pushing into $3. Given steady market conditions without volatility or immediate explanation for higher prices, they are expected to continue in this range. A strong economy combined with the supply interruptions of last summer’s hurricane season is the common explanation for our current prices. ( NOTE: Charts provided by Gasbuddy.com )
Since summer, the Portland market has seen recurring allocation issues at the wholesale level. Not as bad as during the end of summer Labor Day period, but still on a regular basis. If oil companies cannot pull the best prices predictably that definitely has an upward pressure on prices seen at both the retail and commercial delivery level.
The additional fact that crude costs have been steadily rising also bodes for higher prices in 2018. See the Gasbuddy.com chart for the previous six months. Retail gas price averages compared against crude oil markets. Obviously crude is scarce and if that trend continues finished gas and diesel will be rising as well in 2018. Of course other experts such as Kipplingers expect US production to push prices down. It is the gut feeling of Star Oilco though that the Pacific NW will stay on the high end of the recent history above $2.50 a gallon for both diesel and gasoline.
According to AAA Oregon the highest historic price for Gas in Oregon was $4.29 in July of 2008. The high for Diesel was $4.89 in July of 2008. We have a long way to go from the historic high as a reminder of how bad prices can get. AAA shows that in December of 2016 Gasoline was $2.40 a gallon and Diesel was $2.54 a gallon. Prices are roughly $.50 a gallon higher going into 2018. If predicting prices for 2018, this rough estimate is a safe prediction for 2018 prices, unless a recession alters tight supplies currently being seen by the market.
For the sake of looking at it, here’s what happened in the recent wholesale market.
NOTE: Wholesale market pricing does not include road taxes or fees which are over $.50 a gallon in Oregon and Washington dependent on which city you are buying in.
OPIS Average for Portland, Oregon market close reporter for November 1st is:
B5 ULSD Diesel – 2.057
E10 Gasoline – 1.8306
Compared with December 1st, 2017:
B5 ULSD Diesel – 2.0194
E10 Gasoline – 1.8011
Market has been stable at the wholesale average level, yet crude prices have been rising. 2018 will be an interesting year and Star Oilco will not be betting on a $1.50 gas or diesel wholesale cost in the coming year.
If you have questions about this report or want to discuss, please don’t hesitate to reach out to Star Oilco. Our previous, yet recent fuel price reports are below for further reading.