AVG US Gasoline Price Lowest in 3 Years

On Monday, the average U.S. gas prices dropped below $3 per gallon for the very first time in more than three years. This is a welcome relief for Americans who have been struggling with high inflation rates in recent years.

Since the summer driving peak, fuel prices have steadily declined, boosting consumer spending, even though progress on inflation slowed in October and prices of other goods rose.

GasBuddy.com, a market-tracker, reports that the national average price of regular gasoline dropped to $2.97 per gallons on Monday. This is the lowest it has been since May 2021.

Oklahoma had the lowest average retail price of $2.42 a gallon in the United States. Hawaii had the highest prices at $4.48 per gallon.

Fuel demand has slowed down from its recent feverish pace following the pandemic.

Patrick De Haan is the head of GasBuddy's petroleum analysis. He said that it would take 1,300 days to reach the lowest national average for gasoline prices, which are at their lowest level non-COVID since 2015.

He added that the average national gasoline price could drop another 10 to 15cents by Christmas.

The U.S. Energy Information Administration, which is a proxy for demand in the United States, reported that the product supplied of finished motor fuel rose only by 11,000 barrels a day compared to the same period of last year.

Demand increased by 115,000 bpd compared to 2022 levels.

Fuel availability also improved, as refinery capacity increased in the U.S., and other parts of world. This helped to ease the pain of global supply disruptions due to Russia's invasion in Ukraine. This conflict caused U.S. gas prices to reach a record-high of more than $5 per gallon by 2022.

The EIA annual report showed that U.S. oil refinery capacity increased for the second consecutive year last year. The opening of new large plants has also increased the refining capacities in other countries, including Nigeria's Dangote refinery, which produces 650,000 barrels per day, and Mexico's Dos Bocas, which produces 340,000 barrels per day.