Why Gas Prices Are Falling

Experts say supply is strong, demand is lackluster
By Newser Editors and Wire Services
Posted Jun 11, 2024 1:29 PM CDT
Why Gas Prices Are Falling
A station's gas prices are displayed on a pump, Monday, June 10, 2024, in San Antonio   (AP Photo/Eric Gay)

Gas prices are once again on the decline across the US, 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 the 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, the AP reports. 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. Today's falling gas prices, explained:

  • For starters, fewer people may be hitting the road. "Demand is just kind of shallow," AAA spokesperson Andrew Gross says, 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."
  • 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, notes that gas prices typically ease in early summer because of refinery capacity. At this time of year, he says, 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 says. And that stronger supply, paired with weaker consumption, has led to a "bit more noticeable" decline in prices.
  • Could prices go back up? 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.
  • 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 says.
(More gas prices stories.)

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