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Crude oil prices went lower…
Amid lower crude oil prices and weakening fuel demand, U.S. gasoline prices have fallen to the lowest level since January and analysts say there is a chance of below $3 a gallon average American gasoline price by Christmas.
According to AAA, the average price of a gallon of regular gasoline in the United States was $3.216 as of December 6.
The national average gasoline price has now fallen for 11 consecutive weeks, Patrick De Haan, head of petroleum analysis at GasBuddy, wrote on Monday.
For the 11th consecutive week, the nation’s average price of gasoline has fallen, declining by 0.4 cents from a week ago to $3.21 per gallon on Sunday, December 3, according to GasBuddy data compiled from more than 12 million individual price reports covering over 150,000 gas stations across the country.
The national average is now down by 18.9 cents from a month ago and 14.9 cents per gallon lower than at this time last year.
Gasoline prices in some states jumped last week ahead of the OPEC+ meeting on Thursday, which announced rather underwhelming production cuts for early 2024 that were already baked in in crude oil prices.
“The good news is that as the dust settled, OPEC+ agreed to barely move the needle, deepening their production cuts by an additional 900,000 barrels per day in 2024, with Saudi Arabia extending their own million barrel per day cut through March,” De Haan commented.
“However, that wasn’t enough to offset concerns of falling global demand, which pushed oil back down to below $73 in Sunday night trading, giving hope that the national average still could fall to $2.99/gal by the end of the year,” he added.
Further declines are on the cards, and by the end of the year the national average could drop below $3 per gallon—for the first time since the beginning of 2021, AAA spokesperson Andrew Gross told Reuters.
Analysts also expect falling gasoline prices to boost U.S. consumer sentiment at the end of the year.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com