U.S. drivers can expect the cheapest gas prices on Thanksgiving day since 2020.
The national average for gallon of regular gas was about $3.31 on Monday, 25 cents cheaper than a month ago and 36 cents lower than the same period in 2022, according to AAA.
The average national price for a gallon of gas could hit $3.25 by Thursday, which would be the cheapest price on Thanksgiving day since 2020 when the Covid-19 pandemic crushed demand and gas fell to $2.11 per gallon, according to GasBuddy.
Gas has dropped below $3 a gallon in 11 Southern and Midwestern states as of Monday, according to AAA. Those states are Alabama, Arkansas, Georgia, Iowa, Louisiana, Mississippi, Missouri, Oklahoma, South Carolina, Tennessee and Texas.
Prices have fallen for nine weeks now and are on the longest downward streak since the summer of 2022, said Patrick de Haan with GasBuddy.
More than 65,000 gas stations are selling gas at $2.99 per gallon or less right now and another five states could see average prices below $3 per gallon by Thanksgiving, de Haan said.
“Americans collectively going to spend about $1.2 billion less on gasoline from Monday through Sunday from last year,” de Haan said.
OPEC decision ahead
Gas prices could continue to fall for another week or two and potentially dip below last winter’s bottom of $3.05 a gallon, De Haan said. But a lot depends on whether the Organization of Petroleum Exporting Countries implements another oil production cut at their Nov. 26 meeting.
“If OPEC makes a sizable production cut, I think that pretty much ends the potential of us falling below what we saw last year,” de Haan said.
More than 55 million Americans are expected to travel for Thanksgiving, according to AAA. Despite falling gas prices and slowing inflation, about 20% or respondents to GasBuddy’s travel survey said they could not fit holiday travel into their budget due to other areas of inflation.
The drop in gas prices largely reflects a seasonal weakening of demand, though a decline in oil prices over the past several weeks has been the “icing on the cake,” de Haan said.
U.S. gas prices are falling after a recent oil selloff as domestic crude oil inventories rose amid worries that demand is softening.
West Texas Intermediate, the U.S. benchmark, briefly fell into a bear market last week, down 22% from its September closing high. U.S. crude traded higher Monday at $78.02 a barrel, an increase of $2.13 or 2.81% from the previous session on expectations that OPEC might cut production again.
Gasoline demand fell to 8.9 million barrels per day in the week ending Nov. 10, compared to 9.5 million bpd in the week prior, according to the U.S. Energy Information Agency.
At the same time, domestic crude inventories rose by 3.6 million barrels to a total of 439.4 million barrels, outstripping expectations. U.S. crude production continues at a record clip of 13.2 million bpd.