23 Nov. (UPI) — It has been an “incredible turnaround” for U.S. gasoline prices, and prices could fall further given recent trends in the commodity, a leading analyst said.
Motorcycle club AAA reported a national median retail price of $3.61 for a gallon of regular unleaded gasoline for Wednesday, about 3.5% lower than last week and 5% lower than a month ago.
Tight market conditions that prompted Western powers to purchase Russian oil and natural gas as punishment for the war in Ukraine led to a sharp rise in commodity prices over the summer. Brent, the global measure of the price of oil, peaked at $123.58 a barrel in June, pushing U.S. retail gasoline prices to a new high of $5.01 a gallon that month.
Record high inflation, combined with aggressive interest rate policies from the world’s central banks, have cooled the economy somewhat and commodity prices are responding by sliding downwards. In response to rumors of a price cap on Russian oil and gas, crude oil prices fell sharply in Wednesday’s trading, leading to profit-taking ahead of the long US holiday weekend before Thanksgiving.
Brent crude was trading up 4.3% at 11:15 a.m. EST at $84.55 a barrel. GasBuddy senior petroleum analyst Patrick DeHaan said he has seen more than 150,000 gas stations follow energy market trends by setting gas prices at $3 a gallon or less.
“What an incredible change in the past week,” he said. “While more states were expected to fall than last week, I didn’t expect every state to jump on the bandwagon so quickly.”
Texas is by far the only state in the country with an average price of less than $3 per gallon, though Georgia and Mississippi follow closely behind.
Traffic is expected to remain busy on both roads and airports over the upcoming Thanksgiving holiday weekend in the United States. Photo by Bill Greenblatt/UPI
AAA expects about 55 million people to travel at least 50 miles from home this Thanksgiving, up 1.5% from a year ago. And even as retail gasoline prices fall, demand appears resilient against gasoline prices, which are the highest since AAA began tracking data in 2000.
Andrew Gross, a spokesman for AAA, said gasoline prices this time are 20 cents higher than last year and a dollar higher than Thanksgiving 2019 before the pandemic.
“However, we can be thankful that gas prices are moving in the right direction at the moment,” he said.