Gas Prices May Finally Drop Below $3 Just in Time for Holiday Travelers

By: Ben Campbell | Published: Dec 14, 2023

The price of gas in the United States reaches an all-time high during the fall before it begins its retreat from the yearly high. 

Soon, holiday travelers may be in for a surprise as experts claim gas prices may drop to less than $3 a gallon on average across the nation before the New Year arrives.

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).

Woman stops at the side of the road as she drives through heavy snow

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“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. 

Man pumps gas into his car at a local gasoline station

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“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.

Photograph of high gas prices at a Shell fuel station in California

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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.

Tesoro gas station shows off decreasing prices after yearly high

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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. 

Barrels of gasoline lie stacked outside a warehouse

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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. 

Gasoline barrels travel by sea to the United States

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“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. 

Low gasoline prices at a fuel station in Toledo, Ohio

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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. 

Woman shops for fresh produce at a local supermarket

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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. 

Crude oil is poured into a storage barrel for transport

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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. 

Oil drilling equipment pictured in a deforested region

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“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. 

Car drives through snowy conditions during a winter trip home

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Many of these travelers may experience lower-than-usual gas prices. As Milne states, “We are close to a bottom” for retail gas prices.