Colo. Gas Prices Hold Steady…For Now

DENVER (Aug. 5, 2024) – With a lackluster U.S. jobs report stoking fears of a recession and roiling the global markets, what should Coloradans expect when it comes to gas prices, the only economic indicator advertised in flashing lights at the roadside? The good news is that, while Colorado’s gas prices have been remarkably firm since the start of the summer, motorists should expect gradual declines into the cooler months. The bad news is that if prices plummet, we’re likely facing a significant economic slowdown tied to sustained job losses.   

At a statewide level, Colorado’s gas prices sit at $3.39 per gallon of regular grade unleaded. That’s the same as yesterday, up four cents on the week, and exactly where they sat this time last month. Prices are up less than a nickel since June 1, when political commentators suggested the roll-out of EPA-mandated reformulated gasoline would send prices soaring by 50 cents a gallon or more. At this time last year, Coloradans were paying $3.96 for a gallon of gas.

The national average sits at $3.47, down three cents on the week and four cents on the month.

What happens now?

Potential Downward Pressures

• Uneasiness on the global markets typically pushes the commodity price of oil downward. West Texas Intermediate (WTI) crude oil, a benchmark for domestic oil pricing, is down more than $6.00 per barrel since Aug. 1. Since crude oil accounts for 50% to 60% of the cost of a gallon of gasoline, falling oil prices will mean falling gas prices across the board.
   
• Oil prices fall in an economic downturn because a weakened economy requires less refined petroleum to move goods and people around. While that might seem like an economic bright spot, most Americans would choose to keep their jobs and investments while paying a little more for gas.
   
• Regardless of broader economic headwinds, gasoline demand will drop off as the summer driving season ends and students head back to school. Though demand remains high for now on the heels of a historically busy travel year, Coloradans can expect sustained price declines after Labor Day and the switchover to the cheaper winter-blend fuel by September 15. Demand, and pricing, is likely to be heavily regionalized until then. 

Potential Upward Pressures

• Hurricane season tends to hit its peak in mid-September, with the bulk of storm activity occurring between August and October. Regular, heavy storms in the Gulf of Mexico – especially those that tack toward Houston – could kneecap domestic production, since 48% of U.S. refining capacity is located along the Gulf Coast. Refinery shutdowns would send prices upward, though temporarily.
   
• Rising tensions between Israel and Iran could disrupt global oil supply as a result of embargoes and targeted supply chains. That would send prices upward, though the extent would depend on the scope of the conflict. Per the World Bank, oil prices could increase anywhere between 3% and 75% depending on how much the conflict widens.

Key Takeaway

• Gas prices tend to lag one to two weeks behind any sudden change on the oil markets, since previously purchased gasoline remains in service station tanks until sold to consumers. In the near term, Coloradans on the Front Range and Eastern Plains should expect modest declines in the price of both unleaded and diesel fuels – while keeping an eye on global developments, especially this week. For folks on the Western Slope and in the High Country, expect firm prices and even slight upticks as closer-to-home tourism continues in the lead up to Labor Day.
   

“When we talk about gas prices, what we’re really talking about is a micro-expression of macroeconomic trends: From commodity pricing to global conflicts, small international movements can have a big impact on what Coloradans pay at the pump,” said Skyler McKinley, regional director of public affairs for AAA. “The bright spot is that Colorado gas prices have held firm, at reasonable numbers below the national average, all summer long. No matter what happens in the immediate future, we’ll have continued steadiness priced in for at least several weeks. Stay tuned.”

Colorado Gas By the Numbers (Low to High)

Greeley
• Current Average: $3.32
• Yesterday Average: $3.33
• Week Ago Average: $3.31
• Month Ago Average: $3.32
• Year Ago Average: $3.91
• Highest Recorded Average: $4.86 (6/20/22)

Fort Collins - Loveland
• Current Average: $3.38
• Yesterday Average: $3.34
• Week Ago Average: $3.33
• Month Ago Average: $3.35
• Year Ago Average: $3.94
• Highest Recorded Average: $4.86 (6/20/22)

Denver
• Current Average: $3.34
• Yesterday Average: $3.35
• Week Ago Average: $3.32
• Month Ago Average: $3.37
• Year Ago Average: $3.93
• Highest Recorded Average: $4.89 (6/21/22)

Grand Junction
• Current Average: $3.35
• Yesterday Average: $3.35
• Week Ago Average: $3.29
• Month Ago Average: $3.22
• Year Ago Average: $3.94
• Highest Recorded Average: $4.95 (6/29/22)

Boulder - Longmont
• Current Average: $3.38
• Yesterday Average: $3.38
• Week Ago Average: $3.37
• Month Ago Average: $3.39
• Year Ago Average: $3.90
• Highest Recorded Average: $4.92 (6/23/22)

Colorado Springs
• Current Average: $3.38
• Yesterday Average: $3.39
• Week Ago Average: $3.27
• Month Ago Average: $3.43
• Year Ago Average: $3.93
• Highest Recorded Average: $4.95 (6/20/22)

Pueblo
• Current Average: $3.45
• Yesterday Average: $3.45
• Week Ago Average: $3.33
• Month Ago Average: $3.38
• Year Ago Average: $4.06
• Highest Recorded Average: $4.96 (6/21/22)

Glenwood Springs
• Current Average: $3.63
• Yesterday Average: $3.63
• Week Ago Average: $3.49
• Month Ago Average: $3.51
• Year Ago Average: $4.20
• Highest Recorded Average: $5.07 (6/30/22)

Vail
• Current Average: $3.70
• Yesterday Average: $3.70
• Week Ago Average: $3.64
• Month Ago Average: $3.60
• Year Ago Average: $4.41
• Highest Recorded Average: $5.22 (7/4/22)

Durango
• Current Average: $3.71
• Yesterday Average: $3.72
• Week Ago Average: $3.77
• Month Ago Average: $3.68
• Year Ago Average: $4.10
• Highest Recorded Average: $5.06 (6/13/22)