Gas Prices Reach Lowest Point of the Year in the U.S.
The national average price for a gallon of gas in the United States has dropped to $3.137, according to AAA. This represents a 9-cent decrease from last week, making it the lowest average price of the year. The decline can be attributed to the struggle of oil prices to remain above $70 per barrel, as reported by AAA last week. At the same time, OPEC+ announced voluntary production cuts of about 2 million barrels per day.
“Traditionally, crude oil tends to drop by nearly 30% from late September into early winter, with gasoline prices following suit,” said AAA spokesperson Andrew Gross in a report issued on Dec. 7. “More than half of all fuel locations in the U.S. have gasoline priced below $3 per gallon. By the end of the year, the national average may dip that low as well.”
Experts anticipate that the downward trend in the U.S. will continue due to an expected 7% reduction in gas consumption this winter, as the warmer weather brought by El Niño decreases the demand for heat.
Global gas prices are also on the decline due to increased gas production despite lower demand. OPEC+ has announced plans to cut oil supply during the first quarter of 2024 to bolster oil prices. However, there is skepticism among portfolio investors about OPEC+ countries making further cuts to boost prices, according to Reuters. Energy research firm FGE forecasts that OPEC+ will tighten its grip on next year’s market and ramp up production in the second half of 2024, as reported by Insider.
As of Tuesday, Dec. 12, the states with the lowest average gas prices are Texas ($2.60), Mississippi ($2.70), Oklahoma ($2.68), Missouri ($2.70), and Louisiana ($2.71). On the other hand, California ($4.70), Hawaii ($4.70), Washington ($4.260), Nevada ($4.020), and Oregon ($3.99) have the highest average gas prices.
According to AAA, the states that have seen the largest gas price decreases as of Thursday, Dec. 7, are Colorado (−12 cents), Utah (−11 cents), Idaho (−11 cents), California (−10 cents), and Florida (−10 cents).
It seems that drivers across the nation will continue to benefit from the downward trend in gas prices in the near future.