National Average About The Same As This Time Last Year

Topline

The national average price for a gallon of gas dropped to $3.38 on Saturday, according to GasBuddy, bringing it within two cents of where they were at this time last year, as gas prices continue to plummet well below the all-time high reached in June.

Key Facts

Gas prices dropped 17.2 cents over the past week, according to GasBuddy head of petroleum analysis Patrick De Haan, with the decline exceeding the gas analysis group’s “fast case” scenario.

Drivers can find the cheapest gas in Texas, where a gallon costs $2.81, on average, followed by Oklahoma ($2.91), Arkansas ($2.94), Mississippi ($2.96) and Georgia ($2.98), according to AAA.

The only state where gas costs more than $5, on average, is Hawaii ($5.19), as Great Lakes and West Coast states see massive drops over the past month as key oil refineries come back online, with California’s gas falling 68 cents over the past month to $4.81, Illinois’ dropping 60 cents to $3.68 and Oregon’s dropping 66 cents to $4.23.

The drop comes even as gas demand holds steady at 3.2 million barrels per day, according to the Energy Information Administration, while gasoline inventories increased over the past week by 2.8 million barrels to 213.8 million, as of Wednesday, according to De Haan.

Tangent

The drop in gas prices comes one week after crude oil prices dropped to a near-2022 low, with Brent Crude, an international benchmark, falling to $82 per barrel—down 57 cents from its peak of $139 in March. Meanwhile, West Texas Intermediate, a U.S. benchmark, fell to $75 last week, although both indicators have since climbed, with Brent Crude Oil reaching $85 and the West Texas Intermediate reaching $80. The cost of oil, which is refined into gasoline and diesel, accounts for roughly 56% of the price drivers pay at the pump, according to AAA.

Key Background

Gas prices have fallen $1.64 since their peak in June, when a three-month spike in prices set an all-time national record at $5.02. Prices had soared earlier this year amid tight supplies, high inflation and as Russia’s invasion of Ukraine posed a threat to the global energy market. In September, OPEC+ oil-producing countries slashed production by 2 million barrels a day, prompting the Biden Administration to tap into the national Strategic Petroleum Reserve, clearing 14 million barrels per sale—the second time it tapped into the reserves this year, following the sale of 180 million barrels in March.

Big Number

18. That’s the number of states that have seen gas prices fall below December 2021 levels: Alabama, Arkansas, Connecticut, Colorado, Florida, Georgia, Kansas, Louisiana, Mississippi, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Wisconsin and Wyoming, according to GasBuddy. If the drop in prices holds to GasBuddy’s “fast case” scenario, De Haan projects the national average could dip below $3 by Christmas.

Further Reading

Most Common U.S. Gas Price Now $2.99 As Prices Keep Plunging (Forbes)

Oil Drops To Near 2022 Low On China Demand Concerns—Here’s What It Means For Prices At The Pump (Forbes)

U.S. Gas Prices Fall For 10 Straight Days—Nearing $3 In Southeast (Forbes)