Pleasant Surprise for Holiday Travelers
As drivers begin to plan their end-of-year travels, a pleasant surprise in lower gas prices may await them, according to Denton Cinquegrana, chief oil analyst at the Oil Price Informative Service (OPIS).
Source: Freepik
“Falling gasoline prices will give people confidence that their fuel bill will be a nice surprise as drivers take to the road for the holiday travel period,” said Denton.
Average Price of Gas Across the Nation
According to Denton, the lower gas prices will be experienced by around 23 states, which will soon have an average below $3 per gallon.
Source: Freepik
“It shouldn’t be too hard to find,” he said, as about 57% of the stations in the U.S. sell gas for below $3 a gallon.
Prices Continue to Drop Steadily
The national average for regular unleaded gasoline at the beginning of December stood at $3.242 per gallon, and as of last Monday, it fell to $3.153.
Source: Justin Sullivan/Getty Images
Americans can expect up to a 30% drop in the price of crude oil from late September to early winter.
Expect a Dip Before the End of the Year
In a press release last week, Andrew Gross, an AAA spokesperson, explained that we may soon see over 50% of the nation’s fuel station locations across the states selling gas for less than $3 a gallon.
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He finished by saying that the national average may “dip that low as well” before the end of the year.
A Rise in Demand
The lower fuel price follows a slight rise in weekly demand for gasoline along with a considerable increase in fuel supplies during this time of year.
Source: Freepik
According to data sourced from the Energy Information Administration, demand for oil climbed to around 8.466 million barrels a day during the beginning of December.
Gulf Coast Hits a New Record
Gasoline supplies on the Gulf Coast at the start of December reached the most on record, said Cinquegrana.
Source: Freepik
“Refiners in that part of the world will have to do whatever they can to push out gasoline and not create a glut,” he said.
Lowest Prices in Two Years
Future prices for reformulated gasoline, known as RBF24 and RB00, which are traded on the New York Mercantile Exchange, dropped to their lowest price in two years last week.
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According to Dow Jones Market Data, it settled at $2.0012 a gallon, the lowest price recorded since December 3, 2021.
Lower Gas Price Means Cheaper Food?
According to Brian Milne, product manager and editor at DTN, lower gas prices could help reduce the price of daily living in the States.
Source: Freepik
He claims the drop in reformulated gas prices will soon pass through to retail prices in two weeks.
Seasonal Factors Contribute to Changes in Gas Prices
Milne explained that seasonal factors contributing to the change in gas prices have been “exacerbated” by lower crude oil prices.
Source: Freepik
According to Milne, U.S. benchmark West Texas Intermediate crude futures (CLF24) settled at $69.34 on Mymex, the lowest price since June 27.
Demand for Oil
Concern over the slowing of economies worldwide has resulted in a growing supply of gasoline availability, especially in nations like the U.S., according to Milne.
Source: Freepik
“Crude oil costs have dropped back on growing supply availability, namely from the United States, Brazil, and Guyana, and concern over slowing global economies and, as a result, demand for oil,” said Milne.
Travelers Get a Nice Surprise
Data released by the AAA suggests that over 115 million domestic travelers will head 50 or more miles from ver over the 10-day holiday period.
Source: Freepik
Many of these travelers may experience lower-than-usual gas prices. As Milne states, “We are close to a bottom” for retail gas prices.