Energy
Tuesday, November 21st, 2023 3:09 pm EDT
Key Points
- Cheapest Gas Prices Since 2020 for Thanksgiving: U.S. drivers are anticipated to experience the most economical gas prices on Thanksgiving Day since 2020, with the national average for a gallon of regular gas reaching about $3.31 on Monday. This reflects a 25-cent reduction from a month ago and a 36-cent decline from the same period in 2022, providing relief for consumers during the holiday season.
- Extended Period of Falling Gas Prices: Gas prices have been on a consistent decline for nine consecutive weeks, marking the longest downward streak since the summer of 2022. More than 65,000 gas stations are currently selling gas at $2.99 per gallon or less, and the downward trend is expected to continue, potentially reaching an average national price of $3.25 per gallon by Thanksgiving.
- Factors Influencing Gas Prices: The drop in gas prices is attributed to a combination of factors. A seasonal weakening of demand is a primary contributor, but a recent decline in oil prices has further contributed to the downward trend. West Texas Intermediate (WTI), the U.S. benchmark, experienced a brief period of being in a bear market, down 22% from its September closing high. Additionally, the potential for continued decreases in gas prices is linked to the upcoming decision by the Organization of the Petroleum Exporting Countries (OPEC) at their meeting on November 26. If OPEC implements a significant production cut, it could impact future gas prices.
U.S. drivers are poised to enjoy the most affordable gas prices on Thanksgiving Day since 2020, with the national average for a gallon of regular gas reaching about $3.31 on Monday. This marks a 25-cent reduction from a month ago and a 36-cent decline from the same period in 2022, as reported by AAA. Gas prices are expected to continue their downward trend, potentially hitting an average of $3.25 per gallon by Thursday. If realized, this would represent the lowest Thanksgiving Day prices since 2020 when gas prices plummeted to $2.11 per gallon due to the Covid-19 pandemic-induced drop in demand, according to GasBuddy.
Gas prices have already dipped below $3 per gallon in 11 Southern and Midwestern states, including Alabama, Arkansas, Georgia, Iowa, Louisiana, Mississippi, Missouri, Oklahoma, South Carolina, Tennessee, and Texas, according to AAA. The decline in prices has been consistent, lasting for nine consecutive weeks and marking the longest downward streak since the summer of 2022, according to Patrick de Haan from GasBuddy.
Currently, more than 65,000 gas stations are selling gas at $2.99 per gallon or less, and an additional five states may witness average prices fall below $3 per gallon by Thanksgiving, notes de Haan. The collective savings for Americans on gasoline from Monday through Sunday compared to the same period last year is estimated to be around $1.2 billion.
The potential for further decreases in gas prices hinges on the upcoming decision by the Organization of the Petroleum Exporting Countries (OPEC) at their meeting on November 26. De Haan suggests that if OPEC implements a significant production cut, it could prevent gas prices from falling below the levels observed last year.
Despite falling gas prices and slowing inflation, approximately 20% of respondents to a GasBuddy travel survey expressed budget constraints preventing them from incorporating holiday travel into their plans due to inflation in other areas.
The drop in gas prices is attributed to a seasonal decline in demand, with a recent decrease in oil prices contributing to the overall trend. Domestic crude oil inventories have risen, signaling concerns about softening demand. West Texas Intermediate (WTI), the U.S. benchmark, experienced a brief period of being in a bear market last week, down 22% from its September closing high. However, U.S. crude traded higher on Monday at $78.02 a barrel, showing an increase of $2.13 or 2.81% from the previous session, fueled by expectations that OPEC might implement further production cuts.
Gasoline demand declined to 8.9 million barrels per day in the week ending November 10, compared to 9.5 million bpd in the previous week, according to the U.S. Energy Information Agency. Simultaneously, domestic crude inventories rose by 3.6 million barrels to a total of 439.4 million barrels, surpassing expectations. U.S. crude production continues at a record pace of 13.2 million bpd.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/20/us-gas-prices-are-falling-and-could-hit-the-cheapest-thanksgiving-day-price-since-2020.html
