Gas Prices Drop In All 50 States, Although Experts Expect Thanksgiving Will Still Set Record

Topline

Even as gas prices fell in all 50 states on Thursday amid a month-long drop in prices at the pump, experts believe they will still set a Thanksgiving Day record, as Americans gear up for what’s typically the busiest holiday travel weekend of the year.

Key Facts

The national average gas price dropped to $3.725 on Thursday, down from $3.803 last week and $3.413 a month ago, according to data from AAA.

The biggest decrease over the past week came in Wisconsin, where a gallon dropped 24 cents to $3.503, followed by Michigan, falling 21 cents to $3.92, Indiana (down 18 cents to $3.95) and Illinois (down 16 cents to $4.097).

California’s gas (the most expensive in the country, at $5.374 per gallon) is down 8 cents from last week and 68 cents from a month ago, when prices in Los Angeles and San Diego set records ($6.49 per gallon), as several key oil refineries—which produce a petroleum fuel blend—came back online after being shut down for maintenance.

The nationwide decline also comes as gas demand decreases from 9.01 million barrels per day to 8.74 million barrels a day over the past week, according to data from the Energy Information Administration, AAA reported.

Despite slumping demand and as refineries come back online, however, GasBuddy head of petroleum analysis Patrick De Haan still expects Americans will see the “most expensive Thanksgiving Day prices on record,” breaking the previous record of $3.44 in 2012 (a gallon of gas cost $3.413 a year ago, according to AAA).

De Haan also said he expects prices to continue to fall throughout the week.

Key Background

Gas prices had skyrocketed from March to June as crude prices spiked following Russia’s invasion of Ukraine, threatening the global energy market, and as inflation hit a 40-year high. The national average peaked at $5.02 on June 14, setting an all-time record and becoming a central issue in the runup to the midterm elections last week. Although prices have been on a downward trend since then, analysts say the market is still “murky” as oil prices remain volatile. Last month, OPEC+ oil-producing countries cut production by 2 million barrels per day, sparking fears around rising prices among White House officials. De Haan accused the countries of “carefully orchestrating a global economic slowdown and energy crunch by holding oil production down.” Two weeks later, the Biden Administration announced it’s planning to tap into the national Strategic Petroleum Reserve, opening 14 million barrels for sale. The administration had opened another 180 million barrels for sale in March, which lasted through October.

Tangent

Gas is cheapest in Texas, where a gallon costs $3.068, followed by Georgia ($3.151), Mississippi ($3.178) and Arkansas ($3.199). Motorists pay the most for gas in California and Hawaii, the only states where a gallon costs more than $5 (California’s costs $5.374 and Hawaii’s costs $5.199). One reason behind the major variation in price is the difference in state gas taxes. California taxes 53.9 cents on each gallon of gas, the second highest state, behind Pennsylvania, which taxes 57.6 cents per gallon.

Further Reading

Gas Prices Fall For 7 Days As White House Considers Selling Emergency Reserves To Avoid Dreaded Return To $4 Mark (Forbes)

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

Gas Prices Almost $3 In Some Places As National Drop Continues (Forbes)