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Soaring cost of crude oil leads gas prices to seven year high

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The following is a news release from AAA Idaho.

IDAHO FALLS — If gas prices throughout the year resemble a roller coaster ride, this is normally the time when Idaho drivers can look forward to taking a plunge. But the high cost of crude oil may prevent a thrilling drop in seasonal gas prices and leave motorists stuck on the track.

According to AAA, the U.S. average price for regular fuel is at its most expensive in seven years as the price of crude oil climbs toward $78 per barrel. Market uncertainty and tight supplies are the cause of the higher crude prices, which make up about half the price of finished gasoline.

“Lately, the price to fill-up in Idaho has been slowly dropping, but with big jumps hitting so many other parts of the country, it may only be a matter of time before we follow suit,” says AAA Idaho public affairs director Matthew Conde. “Hurricane activity and continued production cuts by OPEC have both played a part in keeping the price of crude oil high.”

Idaho’s average price for regular is $3.73, which is two cents less than a week ago and seven cents less than a month ago. Meanwhile, the U.S. average currently sits at $3.20, a penny more than a week ago and two cents more than a month ago. This week, Ohio led the way with an 11- cent jump in pump prices, followed by Arizona (+7 cents) and North Carolina (+6 cents). The Gem State currently ranks 5th in the country for most expensive fuel, slightly ahead of Oregon and Utah.

According to the Energy Information Administration, domestic gasoline stocks increased slightly last week, but so did fuel demand. Crude oil supplies remain below pre-pandemic levels.

Oil Market Dynamics

In July, OPEC (Organization of the Petroleum Exporting Countries) agreed to increase crude oil production by 400,000 barrels per day as part of a plan to slowly eliminate 5.8 million barrels per day of ongoing cuts. But the organization is now discussing an additional increase of 400,000 barrels per day beginning in November. If a second increase takes effect, it could bolster market confidence and cause crude oil prices to fall, which in turn could lead to cheaper gas prices.

Here’s a selection of Idaho gas prices as of Oct. 4:

  • Boise – $3.85
  • Coeur d’Alene – $3.43
  • Franklin – $3.75
  • Idaho Falls – $3.66
  • Lewiston – $3.37
  • Pocatello – $3.78
  • Twin Falls – $3.83
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