Gas prices are going down across the United States, which means drivers are paying less when they fill up their cars.
According to AAA, the average national gas price on Monday was about $3.44 per gallon. That’s 9 cents lower than last week, marking the biggest weekly drop so far in 2024. Compared to a month ago, prices have dropped by more than 19 cents, and they’re also more than 14 cents cheaper than this time last year.
Why are gas prices falling? Experts say it’s because there’s not as much demand for gas right now, and there’s plenty of gas available. Plus, oil prices around the world are not too high.
There are a few reasons why gas prices are lower now. “Demand is just kind of shallow,” said Andrew Gross, who works for AAA. He said that last year, fewer people were driving because of the COVID-19 pandemic. “Before the pandemic, after Memorial Day, people would start driving more in the summer. But we don’t see that happening anymore.”
Last week, the Energy Information Administration reported that the United States used about 8.94 billion barrels of gasoline each day. That sounds like a lot, but before the pandemic, people used about 10 billion barrels a day at this time of year, Gross said.
Besides the pandemic, experts think gas prices were high because of Russia’s invasion of Ukraine in 2022 and because of inflation. That might have made a lot of Americans change the way they drive. There are also more cars that use less gas or that are electric, Gross said.
But some of the reason for lower gas prices is just because of the season. Patrick De Haan, who works for GasBuddy, said gas prices are lower in early summer because oil refineries can make more gas now. At this time of year, he said, many things that make gas more expensive in late winter and early spring are not happening anymore.
“When the oil refineries are done fixing things, they can make more gas. And that makes gas prices lower,” De Haan said. He also said that refineries in the United States are making more gas now than they have since the COVID-19 pandemic started.
The Biden administration also said last month that it would sell 1 million barrels of gas from a reserve in the Northeast. The idea was to make gas prices lower this summer. But De Haan said that this didn’t make a big difference. One million barrels of gas is not much compared to how much gas the United States uses each day.
“What’s really happening now with gas prices going down is mostly because of normal things that happen at this time of year,” De Haan said.
What about oil prices? Experts say gas prices depend a lot on the price of oil. Oil is what makes gas. Lately, the price of West Texas Intermediate crude oil has been around $78 a barrel. That’s not too bad, Gross said. He said that gas prices usually don’t go up a lot unless oil costs more than $80 a barrel.
Oil prices can change a lot because many things in the world can change how much oil there is. For example, OPEC and other countries that make oil cut down how much oil they make sometimes. This can make oil prices go up.
OPEC+ recently said it would keep cutting how much oil it makes for a while longer. But it also said it would start making more oil again soon. “That’s why oil prices are going down a little now,” De Haan said.
Could gas prices go back up again? Nobody can know for sure. But if nothing big happens, both Gross and De Haan say that prices could keep going down.
Right now, experts are watching out for hurricanes. Hurricanes can hurt refineries and make them stop making gas. “Prices move because people are worried,” Gross said. In the United States, he said, people start to worry when a hurricane is in the Gulf of Mexico. Even if the hurricane doesn’t hit land, refineries might stop working just to be safe. Different places can be hurt in different ways.
But unless something big happens, De Haan thinks that gas prices in the whole country will be between $3.35 and $3.70 for each gallon this summer. Gas prices usually go down more in the fall. De Haan thinks it’s possible that the average gas price could be less than $3 a gallon by late October or early November.
What states have the lowest gas prices now? Even though gas prices are going down all over the country, some states always have cheaper gas. That’s because of things like how close gas refineries are and what kind of gas they make.
Right now, AAA says that Mississippi has the cheapest gas at about $2.94 for each gallon. Oklahoma is next at $2.95, and Arkansas is just under $2.97.
