AAA Monthly Gas Price Report
Average U.S. Gas Prices May Remain Low this Winter
Consumers Paying the Lowest Gas Prices Since December 2010
- Today’s national average price of gas is $3.00 per gallon. AAA expects the national average will drop below $3.00 per gallon tomorrow for the first time since Dec. 22, 2010. Consumers in most of the United States are paying the lowest gas prices in nearly four years.
- Gas prices declined every day in October for a total of 33 cents per gallon, which was the steepest decline in gas prices for the month since 2008. The national average has declined 68 cents per gallon since June 27.
- The average price of gas in October was $3.16 per gallon, which was the lowest monthly average since January 2011. By comparison, gas prices averaged $3.34 per gallon in October 2013.
- Gas prices have dropped unexpectedly quickly in recent weeks mainly due to the decline in the cost of crude oil. The price of West Texas Intermediate crude oil has dropped more than $20 per barrel since late June and more than $10 per barrel since late September due to abundant supplies. Crude oil experienced the biggest one-day drop in two years on October 14.
- Strong oil production has led to higher supplies, and there are some assessments that the global economy is weakening, particularly in Europe and Asia. In addition, there are reports that major Middle Eastern oil producers, such as Saudi Arabia, might be willing to accept lower oil prices in order to maintain market share. If these reports are true, oil prices are likely to remain at current levels or even drop further. OPEC is scheduled to meet and discuss production quotas in November.
- Gas prices typically decline in the fall due to the switchover to less expensive winter-blend gasoline and a decline in demand. Winter-blend gasoline costs less to produce than the equivalent summer blend and those cost savings are gradually passed on to consumers. Gasoline demand also declines after the summer driving season and often continues to drop through winter.
Gas Prices May Remain Relatively Low throughout the Winter
- Gas prices may remain relatively low this winter and could continue to drop another 5-15 cents per gallon in the near term as gas stations catch up with the steep declines in the wholesale market. Nevertheless, if the price of crude oil remains stable, that may act as a brake on further significant gas price declines.
- More affordable gas prices should help drivers just in time for holiday travel and shopping. It is too early to say whether more people will travel for the holidays, but lower gas prices should give consumers more money to spend on dining, shopping and lodging during their trips.
- The national average price of gas could drop to $2.90 per gallon or lower depending on the price of crude oil. There is uncertainty regarding what OPEC plans to do with oil production and prices. If OPEC decides to cut oil production in response to weaker demand, then oil prices could rise and pull gasoline higher. If OPEC decides to maintain its current production levels in order to maintain market share, then crude oil prices could fall further and bring more relief at the pump.
- The health of the global economy remains a question mark. If the global economy further weakens as some economists predict, petroleum demand and prices could drop even more. If it turns out the global economy is stronger than many believe, then this could result in higher gas prices.
- Domestic refinery production remains another factor weighing on markets. Some large refineries recently have conducted seasonal maintenance. Many of these refineries are expected to come back online soon despite abundant supplies. Both oil and gas prices may rise or fall depending on the strength of refinery production in the coming weeks.
More than Sixty Percent of Stations are Selling Gas for Less than $3.00
- More than 60 percent of U.S. gas stations are selling gas for less than $3.00 per gallon today. Consumers can find at least one station selling gas for less than that price in 47 states – the exceptions being Hawaii, Alaska and Wyoming. More than 10 percent of U.S. gas stations are selling gas for less than $2.75 per gallon today.
- Twenty-two states have average gas prices below $3.00 per gallon today. The lowest gas prices today are primarily in the Southeast and Central United States, which are regions that typically have lower gas taxes, access to domestic crude oil and abundant refinery capacity.
- The five states with the highest average prices today include: Hawaii ($4.04), Alaska ($3.73), New York ($3.37), California ($3.33) and Connecticut ($3.33). The five states with the lowest gas prices today include: South Carolina ($2.75), Tennessee ($2.75), Mississippi ($2.78), Virginia ($2.78) and Texas ($2.80).
AAA updates fuel price averages daily at www.FuelGaugeReport.AAA.com. Every day up to 120,000 stations are surveyed based on credit card swipes and direct feeds in cooperation with the Oil Price Information Service (OPIS) and Wright Express for unmatched statistical reliability. All average retail prices in this report are for a gallon of regular, unleaded gasoline. For more information, contact Michael Green at 202-942-2082, email@example.com.