Drivers Rejoice: Gas Prices Near One-Year Low Ahead Of Busy Thanksgiving Weekend - Forbes

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Drivers can expect to see long-awaited relief at the pump this weekend when millions of Americans are predicted to hit the road for Thanksgiving, as gas prices continue their downward slide to the lowest level since January, with gas demand and oil prices continuing to drop even as the international oil market remains turbulent.

Key Facts

The national average price for a gallon of gasoline dropped to $3.27 Wednesday, the lowest price in the U.S. since mid-January, according to data from GasBuddy, though AAA puts the national average slightly higher at $3.28.

That puts the national average 36 cents below where it was at this point last year ($3.64), according to AAA, while prices this week are only 10 cents higher than their lowest point this year, on January 1 ($3.17).

Gas prices in the U.S. have dropped nearly 26 cents per gallon over the past month, capping off the longest running price decline in more than a year, with more than 65,000 U.S. gas stations selling a gallon of gas below $3 and prices especially low in southern states like Mississippi and Texas, according to Patrick De Haan, head of petroleum analysis at GasBuddy.

Prices have been falling steadily in the U.S. since September 16, when prices hit their highest point so far this year at $3.86, as states transition to cheaper winter fuel blends and as gas demand continues to drop, though demand rebounded slightly in the week ending November 18, rising 1.1%, according to GasBuddy.

According to the Energy Information Administration, gas demand in the U.S. increased from 8.99 million barrels per day over the first week of November to 9 million barrels per day in the week ending November 10, putting it slightly above November 2022 levels, when demand tapered off after summer gas prices hit a record high.

The price of crude oil, a typical indicator of gas prices, has also slumped over the past month, with the international benchmark Brent Crude Oil dropping to a two-month low of just above $82 and the national benchmark West Texas Intermediate falling to $74, a four-month low, even as the international oil market remains volatile as giants Saudi Arabia and Russia make cuts to oil production.

What To Watch For

More than 55 million Americans are expected to travel this Thanksgiving weekend, including 49 million expected to hit the road, according to AAA. The weekend is also projected to be the busiest air travel weekend in nearly two decades, with 4.7 million traveling by plane. Another 1.5 million Americans are expected to travel this weekend by bus, train or ferry, marking a 2.3% increase in total Thanksgiving travelers in the U.S. from last year.

Contra

Even as gas prices drop, drivers are still paying more than $4, on average, for a gallon of gas in five states—California ($4.94), Hawaii ($4.74), Washington ($4.42), Nevada ($4.23) and Oregon ($4.08)—while gas prices in the Northeast also remain stubbornly high. A gallon in New York costs, on average, $3.60 per gallon, while prices in Pennsylvania average $3.59, according to AAA.

Surprising Fact

Mid-Atlantic gas station chain Sheetz cut the price of its Unleaded 88 gas to $1.99, and plans to keep the price below $2 through Monday, November 27, putting the price more than $1 below the average price in Pennsylvania, New Jersey, New York, Maryland, Ohio, Delaware, West Virginia and Virginia.