kckate16/iStock via Getty Images
Gasoline prices in the U.S. are now lower than at this time last year – if only by a penny – and market watchers say prices at the pump could fall below $3 per gallon for most Americans by the end of this year or early next year.
The national average for a gallon of gas Thursday was $3.329, AAA reported, down from $3.343 at this time last year and about a third lower than the record high of $5.01 in mid-June.
Gas prices fell $0.15 per gallon in the past week and $0.47 from a month ago.
Prices vary widely by region, already below $3.00 per gallon in several southern states while California remains the highest in the continental U.S. at $4.621 – although that’s down $0.28 in the past week.
Some analysts believe prices could tip below $3.00 on average as demand typically wanes after the busy holiday season when people often have less energy and money to travel.
Gasoline should slide below $3.00 for most Americans, before prices start to tick higher when refiners begin to produce summer blends in February, says Tom Kloza, global head of energy analysis at Oil Price Information Service.
Prices also are sliding for diesel fuel, but at a much slower pace; diesel averaged $5.00 on Thursday compared with $3.61 a year ago, and unlike gasoline, demand for diesel remains robust.
Diesel is in short supply globally because Russia was a large oil and fuel exporter to Europe.
A wild card for prices is the timing of the reopening of the Chinese economy from strict COVID lockdowns, which would boost demand sharply for oil and other commodities.
Gasoline prices are closely tied to crude oil, whose costs account for slightly more than half of the price in a gallon of gas, and U.S. WTI front-month crude futures closed Thursday at a fresh YTD low of $71.46 per barrel.
