According to AAA, the average price of a gallon of gas nationwide this morning is $3.23. Fifteen states have an average price under $3.
The motoring club says the price of gas has “kept up its torrid pace of decline, sinking six cents since last week.” Prices stood at $3.85 a year ago today.
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Reuters predicts that if the pace of decline continues, “U.S. motorists should see gasoline prices fall below $3 a gallon for the first time in over three years as soon as next month, shortly before they go to vote in November’s presidential election.”
Credit Decreasing Demand
Decreasing demand gets some of the credit.
Americans burned about 8.5 million barrels of gasoline per day the week ending September 6 (the most recent week for which data are available), according to the U.S. Energy Information Administration (EIA). That’s down from about 9 million at the start of August.
Demand will almost certainly fall further.
Patrick De Haan, head of petroleum analysis for GasBuddy, told Yahoo! Finance, “Americans just don’t drive as much in fall.” Gas prices typically drop in early autumn, irrespective of demand.
Refiners usually switch to less-expensive winter blends of gasoline in September. Stations typically post a price drop as they sell off their last delivery of expensive summer gas and refill tanks with the cheaper stuff.
Tom Kloza, global head of energy analysis at the Oil Price Information Service, told The Hill he sees another reason to expect a price drop. Oil prices are already at their lowest level in about three years, he explains. The Organization of Petroleum Exporting Countries (OPEC+) recently voted to increase oil production anyway.
Bad Weather May Influence Prices
One threat to low prices remains: forecasters have predicted a busier-than-average Atlantic hurricane season in 2024. When hurricanes form far enough west, they can threaten America’s refining infrastructure, concentrated in the Gulf of Mexico.
So far, the prediction hasn’t been borne out. Hurricane Francine “made landfall Wednesday on the Louisiana coast before being downgraded to a tropical storm, taking some energy infrastructure offline along the U.S. Gulf Coast from Louisiana through Alabama,” the EIA notes. The storm never grew out of Category One, minimizing the threat.
The National Hurricane Center is currently tracking two possible threats. Hurricane Gordon remains in the central Atlantic, likely to arc north before reaching the U.S. A tropical disturbance in the Northern Leeward Islands is much closer to shore, but the agency says it has just a 20% chance of becoming a cyclone in the next 48 hours.
