U.S. Gas Prices Are Falling, Could Reach Cheapest Thanksgiving Price Since 2020

Gas prices at a Chevron gas station in Newhall, California. Monday, September 18, 2023. The average price of a gallon of regular gasoline in Los Angeles County increased 4.8 cents today to $5.915, a day after increasing 13.6 cents. The average price has increased 52 times over the past 57 days, increasing 94.3 cents, according to figures from AAA and the Oil Price Information Service. (Photo by Hans Gutknecht/MediaNews Group/Los Angeles Daily News via Getty Images)

Hans Gutknecht | Medianews Group | Getty Images

US drivers can expect the cheapest gas prices on Thanksgiving Day since 2020.

The national average for a gallon of regular gasoline was about $3.31 Monday, 25 cents lower than a month ago and 36 cents lower than the same time in 2022, according to AAA.

The national average price of a gallon of gasoline could reach $3.25 by Thursday, which would be the cheapest price on Thanksgiving since 2020, when the Covid-19 pandemic crushed demand and gasoline fell to $2.11 per gallon, according to GasBuddy.

Gas fell below $3 a gallon in 11 Southern and Midwestern states Monday, according to AAA. These states are Alabama, Arkansas, Georgia, Iowa, Louisiana, Mississippi, Missouri, Oklahoma, South Carolina, Tennessee and Texas.

Prices have been falling for nine weeks now and are in the longest declining streak since summer 2022, said GasBuddy’s Patrick de Haan.

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Gasoline futures, year-to-date

More than 65,000 gas stations currently sell gasoline for $2.99 ​​a gallon or less and five more states could see average prices below $3 a gallon by Thanksgiving, de Haan said.

“Americans will collectively spend about $1.2 billion less on gasoline Monday through Sunday compared to last year,” de Haan said.

OPEC decision to come

Gas prices could continue to fall for another week or two and potentially fall below last winter’s low of $3.05 a gallon, De Haan said. But much depends on whether the Organization of the Petroleum Exporting Countries will implement a further cut in oil production at its November 26 meeting.

“If OPEC significantly cuts production, I think that will end the risk that we fall below what we saw last year,” de Haan said.

More than 55 million Americans are expected to travel for Thanksgiving, according to AAA. Despite falling gas prices and slowing inflation, about 20% of respondents to GasBuddy’s travel survey said they couldn’t fit vacation travel into their budget due to other inflation factors.

The drop in gas prices largely reflects a seasonal weakening in demand, although the drop in oil prices in recent weeks has been the “icing on the cake”, de Haan said.

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Crude Oil Futures Year-to-Date

U.S. gas prices are falling after a recent oil sell-off, as domestic crude oil inventories have risen due to fears of a slowdown in demand.

West Texas Intermediate, the U.S. benchmark, briefly fell into a bear market last week, down 22% from its September closing high. U.S. crude was trading higher on Monday at $78.02 a barrel, up $2.13 or 2.81% from the previous session on expectations that OPEC could cut its oil again. production.

Gasoline demand fell to 8.9 million barrels per day in the week ending November 10, from 9.5 million bpd the previous week, according to the U.S. Fuel Information Administration. ‘energy.

At the same time, domestic crude inventories increased by 3.6 million barrels to a total of 439.4 million barrels, beating expectations. US crude production continues at a record level of 13.2 million b/d.

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