There could be more presents under the tree this year for U.S. drivers, with gasoline prices plummeting to their lowest levels in 2.5 years.
The national average price for a gallon of regular gasoline in the United States was $3.087 as of Friday, according to data supplied by AAA. This compares with #3.193 a year ago today, and is the lowest level since June 2021, right before gasoline prices began their climb to $5 per gallon, which it hit the following summer.
This drop in gasoline prices could offset high inflation for consumers, Bloomberg suggested on Friday, when it pointed out that the falling price of gasoline already bolstered November retail sales.
So what’s in store for December? If gasoline prices continue to fall—and some analysts expect that is precisely what will happen, consumers will have more funds to do some extra Christmas shopping and engage in activities like dining out and additional entertainment.
The reason for the gasoline drop, according to AAA, are “tepid demand and a low cost for oil, which is hovering around $70 per barrel” AAA said on Thursday.
“With pump prices falling slowly each day, it is likely that the national average will slide below $3 per gallon by the end of the year,” AAA spokesman Andrew Gross said. Meanwhile, the latest EIA data suggests that gasoline demand increased from 8.47 million bpd to 8.86 million bpd last week, while inventories still managed to grow.
For President Biden, the falling gasoline prices are viewed positively, with voters enjoying the relief provided by falling gasoline prices.
“If oil prices remain low, drivers can expect pump prices to do the same during the holiday season,” AAA said.
By Julianne Geiger for Oilprice.com
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