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Increase in supply has fueled gas price drop

Why have gas prices fallen so sharply in the past month?

— Adam G., Talent

Maybe that's a question best left unasked, Adam. Don't want to give those big oil companies any ideas.

But you're right: The average price for gas in Oregon fell below $4 a gallon last week just in time for summer vacationing and has dropped by more than 50 cents a gallon since May.

As of Friday, gas prices in the Medford and Ashland area averaged $3.77 a gallon. The average price was $4.31 a gallon just last month.

So, why the sudden drop in prices?

Increased supply of oil, according to Marie Dodds, AAA spokeswoman for Oregon and Idaho. Across the nation, prices have steadily fallen since April, when the national average price per gallon peaked at $3.94.

Earlier this year, the third-largest oil refinery on the West Coast at Cherry Point, Wash., shut down for three months from fire damage, Dodds said. Once the refinery reopened in late May, the gas supply increased, and as a result, prices fell. Other refineries that were closed in California because of maintenance issues also have reopened, which contributed to the drop in prices.

Although increased supply is the most likely reason for cheaper gas prices, Dodds said changes in gas prices are never easy to explain.

"There's some regional, national and often many international events that all affect gas prices," she said. She predicts the state will see gas prices fall to $3.70 or lower in the next few weeks.

That's already happened at a number of stations. Locally, Safeway, the north Medford Fred Meyer and Costco were all reporting prices below $3.50 a gallon Friday evening. The lowest price at a stand-alone gas station was $3.57 a gallon at the Spirit station at 1325 Court St., Medford.

Despite the seemingly good news, Oregon gas prices are still the fourth-highest in the nation, lower than only Washington, California and Alaska.

Send questions to "Since You Asked," Mail Tribune Newsroom, P.O. Box 1108, Medford, OR 97501; by fax to 541-776-4376; or by e-mail to youasked@mailtribune.com. We're sorry, but the volume of questions received prevents us from answering all of them.