(Reuters) – U.S. gasoline prices are significantly lower this year as Labor Day approaches, marking the end of the summer driving season, according to the U.S. Energy Information Administration (EIA). The average price for regular gasoline was $3.31 per gallon as of August 26, a 13% decrease from the same time last year.
Importance of the Decline
The EIA noted that gasoline demand is higher this Labor Day weekend compared to last year. Recent data, for the week ending August 23, revealed U.S. gasoline consumption at 9.3 million barrels per day, the highest for August since 2022. However, the EIA expects demand to drop after the summer season ends, which should help keep gasoline prices lower in the coming months.
Context
Gasoline prices have fallen due to sluggish growth in global and U.S. petroleum demand, increased crude oil production from non-OPEC+ countries, and a slowing Chinese economy. The EIA also pointed out that refinery outages in the U.S. Midwest caused regional gasoline prices to rise more than 20% above the national average from July 22 to August 5.
Current Statistics
U.S. gasoline inventories stand at 221 million barrels, about 3% higher than last year, according to EIA data. On August 26, 2024, Brent crude oil prices were down 4% from the previous year. As of June, crude oil prices were estimated to account for 55% of the price of gasoline.