Drivers nationwide are finally seeing relief at the pump as the average price of regular gasoline dips below $4 a gallon for the first time in months. According to AAA data, the national average dropped to $3.94, driven down by falling crude oil costs, seasonal demand shifts, and cheaper winter fuel blends.
National Gas Prices Fall Below Four Dollars
“Many will assume the election had something to do with it, but that’s a myth,” Patrick De Haan, head of petroleum analysis at GasBuddy, wrote in his industry newsletter. Gasoline prices dropped about 40 cents over the past month, landing at a national average of $3.94 for regular fuel, NPR reported.
The decline crossed below the $4 mark on Tuesday, moving down from $4.14 on Election Day, according to AAA. Despite the relief, AAA said that gasoline prices remain the highest they have ever been at this time of year.
Crude Oil Drops Drive Down Fuel Costs
The main driver behind the plummeting pump prices is the falling cost of Brent crude oil, which dropped to about $90 a barrel. Jorge León, head of geopolitics at Rystad Energy, pointed to the falling price of Brent crude oil, which is what refineries need to make gasoline, diesel and jet fuel.
West Texas Intermediate crude traded at $86, Marketplace.org reported. Gregory Brew, a senior analyst with Eurasia Group’s Energy, Climate and Resources team, said that the oil market is currently well-supplied because the U.S. successfully moved oil out of the Strait of Hormuz over the past two months.
GasBuddy showing the national average price of gasoline down to $3.936/gal, unless you're using Already-Aged Average data which is days behind. Should drop to $3.89 or so by weekend. Diesel down to $6.12/gal and should fall under $6 by Thanksgiving.
Refineries Switch to Cheaper Winter Blends as Summer Driving Fades
Seasonality plays a major role in the price drop as peak summer driving fades into colder weather. Refineries also finished their annual autumn maintenance, increasing overall fuel supplies on the market.
Refineries switched from expensive summer gasoline blends to cheaper winter blends containing more butane, which helps engines start in freezing weather.
While the transition normally happens on September 15, the Environmental Protection Agency and the Department of Energy moved the date up to September 1 to counter price spikes driven by the war in Iran.
Diesel Prices Remain Stubbornly High
While regular gasoline dipped below $4, diesel prices stayed elevated at $6.15 a gallon, down slightly from $6.28 on Election Day, NBC News reported. Tom Kloza, an energy advisor for Gulf Oil, explained that diesel demand softens in November after the agricultural season concludes and before heavy winter demand begins.
However, commercial diesel costs remain elevated by more than 70% since the start of the year. The prolonged high prices stem from the ongoing conflict in Ukraine and the persistent targeting of energy infrastructure in Russia, which has historically been a major global diesel exporter.
Uncertain Future for Energy Markets
Market analysts warn that ongoing diplomatic talks and geopolitical shifts could easily reverse recent price drops.
“How all this plays out is still highly uncertain,” ING’s team said.
“The period between now and January 3rd, when the new Democratic Congress is seated, is a ‘lame duck’ window during which the White House could seek to advance foreign policy objectives as well as personnel changes with fewer political constraints. This period could see either accelerated dealmaking or renewed escalation, meaning markets could remain choppy even if the longer-term direction points to eventual diplomatic resolution.”
More on Election Day
BREAKING: US average retail gasoline price drops below $4 a gallon (to $3.9788) for the first time in 114 days. Despite the fall in prices, the average cost is still up ~30% from pre-war levels (but that's a lot better than a peak of ~53% increase set in May).
US gasoline retail prices have a LOT of space to fall. Yes, rockets and feathers. Yet, judging by the very slow drop in retail prices vs the plunge in wholesale costs, the feather must be from a tiny hummingbird. Don't be surprised if the White House starts to apply pressure.
Worth a look