US gas prices are falling. Experts point to mild demand at the pump ahead of summer travel (2024)

US gas prices are falling. Experts point to mild demand at the pump ahead of summer travel (1)

By The Associated Press and WYATTE GRANTHAM-PHILIPS

Published: Jun. 11, 2024 at 7:22 AM EDT|Updated: 1 hour ago

NEW YORK (AP) — Gas prices are once again on the decline across the U.S., bringing some relief to drivers now paying a little less to fill up their tanks.

The national average for gas prices on Monday stood around $3.44, according to AAA. That’s down about 9 cents from a week ago — marking the largest one-week drop recorded by the motor club so far in 2024. Monday’s average was also more than 19 cents less than it was a month ago and over 14 cents below the level seen this time last year.

Why the recent fall in prices at the pump? Industry analysts point to a blend of lackluster demand and strong supply — as well as relatively mild oil prices worldwide.

Here’s a rundown of what you need to know.

Today’s falling gas prices, explained.

There are a few factors contributing to today’s falling gas prices. For starters, fewer people may be hitting the road.

“Demand is just kind of shallow,” AAA spokesperson Andrew Gross said, pointing to trends seen last year and potential lingering impacts of the COVID-19 pandemic. “Traditionally — pre-pandemic — after Memorial Day, demand would start to pick up in the summertime. And we just don’t see it anymore.”

Last week, data from the Energy Information Administration showed that U.S. gasoline demand slipped to about 8.94 billion barrels a day. That might still sound like a lot — but before the pandemic, consumption could reach closer to the 10 billion barrel-a-day range at this time of year, Gross said.

Beyond pandemic-specific impacts, experts note that high gas prices seen following Russia’s invasion of Ukraine in 2022 and persistent inflation may have led many Americans to modify their driving habits. Other contributing factors could be the increased number of fuel-efficient cars, as well as electric vehicles, on the road today, Gross said.

Some of this is still seasonal. Patrick De Haan, head of petroleum analysis at GasBuddy, noted that gas prices typically ease in early summer because of refinery capacity. At this time of year, he said, many factors boosting prices in late winter and early spring — particularly refinery maintenance — are no longer present.

“Once refinery maintenance is done, output or utilization of the nation’s refineries goes up — and that contributes to rising supply,” De Haan said. And that stronger supply, paired with weaker consumption, has led to a “bit more noticeable” decline in prices this year. He added that U.S. refinery utilization is at some of its highest levels since the pandemic.

Separately, the Biden administration announced last month that it would be releasing 1 million gasoline barrels, or about 42 million gallons, from a Northeast reserve with an aim of lowering prices at the pump this summer. But De Haan noted that such action has little impact nationally — 42 million gallons equals less than three hours of U.S. daily gas consumption.

“Really, what we’re seeing right now with (declining) gasoline prices ... has been driven primarily by seasonal and predictable economics,” he said.

What about oil prices?

Experts also point to cooling oil costs. Prices at the pump are highly dependent on crude oil, which is the main ingredient in gasoline.

West Texas Intermediate crude, the U.S. benchmark, has stayed in the mid $70s a barrel over recent weeks — closing at under $78 a barrel Monday. That’s “not a bad place for it to be,” Gross said, noting that the cost of crude typically needs to go above $80 to put more pressure on pump prices.

Oil prices can be volatile and hard to predict because they’re subject to many global forces. That includes production cuts from OPEC and allied oil producing countries, which have previously contributed to rising energy prices.

OPEC+ recently announced plans to extend three different sets of cuts totaling 5.8 million barrels a day — but the alliance also put a timetable on restoring some production, “which is likely why the price of oil had somewhat of a bearish reaction,” De Haan said.

Could prices go back up?

The future is never promised. But, if there are no major unexpected interruptions, both Gross and De Haan say that prices could keep working their way down.

At this time of year, experts keep a particular eye out for hurricane risks — which can cause significant damage and lead refineries to power down.

“Prices move on fear,” Gross said. In the U.S., he added, concern particularly rises once a hurricane enters the Gulf of Mexico — and even if it doesn’t eventually make landfall, refineries may pull back on operations out of caution. Impacts can also range by region.

But barring the unexpected, analysts like De Haan expect the national average to stay in the range of $3.35 to $3.70 per gallon this summer. Gas prices typically drop even more in the fall, and it’s possible that we could see the national average below $3 in late October or early November, he said.

What states have the lowest gas prices today?

While gas prices nationwide are collectively falling, some states always have cheaper averages than others, due to factors ranging from nearby refinery supply to local fuel requirements.

As of Monday, per AAA data, Mississippi had the lowest average gas price at about $2.94 per gallon — followed by $2.95 Oklahoma and just under $2.97 in Arkansas.

Meanwhile, California, Hawaii and Washington had the highest average prices on Monday — at about $4.93, $4.75 and $4.41 per gallon, respectively.

Copyright 2024 The Associated Press. All rights reserved.

US gas prices are falling. Experts point to mild demand at the pump ahead of summer travel (2024)


Why are gas prices higher in summer? ›

Gas prices tend to rise during the warmer months of the year because of higher demand and a switch to summer-blend gasoline. The direction of crude oil prices and other factors also can contribute to higher prices at the pump.

Is demand for gasoline falling? ›

Today's falling gas prices, explained.

“Traditionally — pre-pandemic — after Memorial Day, demand would start to pick up in the summertime. And we just don't see it anymore.” Last week, data from the Energy Information Administration showed that U.S. gasoline demand slipped to about 8.94 million barrels a day.

How does gas prices affect supply and demand? ›

Gasoline prices generally follow crude oil prices. Gasoline prices tend to increase when the available gasoline supply decreases relative to real or expected gasoline demand or consumption.

Who controls gas prices in the USA? ›

Petroleum prices are determined by market forces of supply and demand, not individual companies, and the price of crude oil is the primary determinant of the price we pay at the pump.

What is the main reason gas prices are so high? ›

Several factors go into what drivers pay for gas, including refining costs, taxes, distribution and marketing, and crude oil prices, according to the U.S. Energy Information Administration. High taxes are partly to blame in California. The state has the highest gasoline taxes in the nation, according to EIA.

Why do oil prices go up in the summer? ›

First, the hurricane season could disrupt production in the Gulf of Mexico, or even the appearance of such a storm could cause jitters in the market that cause price increases. The other factor is extreme summer heat: Last year was the hottest summer on record, and 2024 will likely bring similar extremes.

How much will gas be in 5 years? ›

U.S. gasoline prices are expected to average around $3.40 a gallon in 2024 and $3.20 in 2025, compared with around $3.50 in 2023, according to the EIA's Short Term Energy Outlook report.

Will gas prices go down if there is a recession? ›

Most experts believe that a recession would cause gas prices to fall. However, because not all gas is produced domestically, external factors such as the Russian invasion of Ukraine may keep prices high.

Why is there a gas shortage in 2024? ›

EIA projected dry gas production will ease from a record 103.79 billion cubic feet per day (bcfd) in 2023 to 102.99 bcfd in 2024 as several producers reduce drilling activities after gas prices fell to a 3-1/2-year low in February and March.

When gas prices rise, demand for gas will decrease.? ›

An increase in price results in more consumer expenses resulting in less gasoline consumption; if the income levels do not increase, this will lead to less demand for gasoline in the united states.

How many gallons to fill a car? ›

How Many Gallons of Gas Can a Car Hold On Average? Most vehicles' average fuel tank capacity is between 10.5 and 18.5 gallons. Smaller vehicles like subcompact crossovers and other hatchback models generally hover somewhere around 12 gallons. However, subcompact models, like the Chevrolet Spark, yield a 9-gallon tank.

Are high gas prices good for the economy? ›

When gas prices rise, it can be a drag on the economy—impacting everything from consumer spending to the price of airline tickets to hiring practices.

Who owns US gas? ›

In 2019, after the acquisition of USA Gasoline's parent company Andeavor by Marathon Petroleum, many USA Gasoline locations were (as of 2020) in the process of being rebranded to Marathon's now-former subsidiary, Speedway, now wholly owned and operated by 7-Eleven.

Who owns all the oil companies? ›

Contrary to popular belief, only about one percent of the shares of the five major oil companies are held by officers and directors of these companies. The rest is held by institutional investors and individual Americans, mostly in retirement accounts.

Does the US government have anything to do with gas prices? ›

Drivers suffering from price whiplash might be asking, "Who controls gas prices?" The short answer is that no single person, company or government can really be said to set gas prices, the same way that no single entity controls the prices of the most common types of car insurance.

Why is summer gas more than winter gas? ›

Even though prices are slightly higher for summer blend fuel—because it contains less butane—the summer blend contains 1.7 percent more energy than the winter blend. As a result, your gas mileage should be a little higher in the summer months to offset some of the added cost you pay at the pump.

Does summer gas get better mileage? ›

Hot weather can increase fuel economy - the engine warms up to an efficient temperature faster; summer grades of gasoline can have slightly more energy; and warm air causes less aerodynamic drag than cold air.

What state has the highest gas price right now? ›

California has the highest price of gas, with an average of $4.82 per gallon of regular gas. Table with 0 columns and 0 rows. Per gallon of regular gas. Prices are updated daily.

Top Articles
Latest Posts
Article information

Author: Fredrick Kertzmann

Last Updated:

Views: 6728

Rating: 4.6 / 5 (46 voted)

Reviews: 85% of readers found this page helpful

Author information

Name: Fredrick Kertzmann

Birthday: 2000-04-29

Address: Apt. 203 613 Huels Gateway, Ralphtown, LA 40204

Phone: +2135150832870

Job: Regional Design Producer

Hobby: Nordic skating, Lacemaking, Mountain biking, Rowing, Gardening, Water sports, role-playing games

Introduction: My name is Fredrick Kertzmann, I am a gleaming, encouraging, inexpensive, thankful, tender, quaint, precious person who loves writing and wants to share my knowledge and understanding with you.