The national average price of gasoline in the United States has dropped below $3 per gallon for the first time in over three and a half years. According to data from GasBuddy, which tracks more than 12 million price reports across 150,000 gas stations, the average price on Monday was $2.97 per gallon—levels not seen since 2021. Additionally, 35 states now have average gas prices below $3, a rise of seven states from just a month ago.
Patrick De Haan, head of petroleum analysis at GasBuddy, commented, “The national average has finally fallen below $3 per gallon, and it couldn’t come at a better time for motorists with the holidays just around the corner. It’s been over 1,300 days since we’ve seen the national average this low. Gasoline affordability is now at its lowest non-COVID level since 2015.”
Oil prices are the main driver of gasoline prices in the U.S. Experts at Standard Chartered predict that U.S. oil production will not see significant growth under President Trump. While U.S. crude production has increased by 4.7 million barrels per day (mb/d) since the pandemic’s low in May 2020, it is only 0.4 mb/d higher than pre-pandemic levels from November 2019. This equates to an annual production growth rate of just 80,000 barrels per day (kb/d). The growth rate is expected to slow even further in 2024 and 2025, with projections of just 630 kb/d in 2024 and 300 kb/d in 2025.
Despite President Trump winning a second term in office more than a month ago, oil markets are still struggling to find direction. Geopolitical risks, especially in the Middle East, continue to add uncertainty. StanChart analysts note that oil markets seem hesitant to take a firm stance, suggesting traders are waiting for Trump to officially take office before making major moves.
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