Gasoline Prices Expected to Drop Ahead of Memorial Day/Weekend Travel

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For the third consecutive week, the nation’s average price of gasoline has dropped, falling 3.2 cents from a week ago to $3.58 per gallon Monday, according to GasBuddy® data compiled from more than 12 million individual price reports covering over 150,000 gas stations across the country. The national average is down 3.7 cents from a month ago but is 6.1 cents per gallon higher than a year ago. The national average price of diesel has fallen 4.6 cents in the last week and stands at $3.90 per gallon— 9 cents lower than one year ago.

“While pump prices haven’t exactly plummeted, we’ve seen the average price of gasoline drop in a majority of states over the last week as refineries finish maintenance and ramp up output of products like gasoline,” said Patrick De Haan, head of petroleum analysis at GasBuddy.

“With gas prices now nearing a 10-cent drop to the high we saw a few weeks ago, the future looks good as we get closer to Memorial Day; price drops could potentially accelerate after last week’s jobs data shows the economy continues to cool off. While gas prices stand slightly above where they were last year, I expect most Americans will see prices fall before the holiday weekend, and I’m optimistic the trend could extend into June and beyond. I’m excited to say it does appear that for now, the worst is behind us.”

Struggling under the pressure of economic slowdown, oil prices have languished below $80 for the past few trading sessions, with WTI crude oil touching $77.99/bbl overnight before a modest recovery. Recent perception of the geopolitical balance in the Middle East has softened somewhat, pushing oil lower as Israel sees more international pressure to end its fight on Hamas. Meanwhile, the U.S. Federal Reserve continues to paint the picture that interest rates may need to stay elevated for longer than anticipated, which could lead to softer oil demand over the summer driving season. In early Monday trade, WTI crude was up 57 cents to $78.83 per barrel, nearly identical to last week’s $78.74 per barrel start. Brent crude oil was also trading up 55 cents to $83.34 per barrel, slightly lower than last Monday’s $83.51 per barrel start.

Last week’s report from the EIA showed oil inventories falling 1.4 million barrels, while the SPR tacked on another 900,000 barrels, with domestic crude oil production holding at 13.1 million barrels per day. Gasoline inventories edged up by 900,000 barrels, which now stand 8.3 million barrels above a year ago. Distillate inventories fell some 600,000 barrels but are up 10.3 million from a year ago. Implied gasoline demand, EIA’s proxy for retail consumption, rose 178,000 barrels to 8.80 million per day, while refinery utilization rose 1 percentage point to 88.5% as refiners wrap up maintenance and boost output. Total U.S. inventories are up 4.7 million barrels from a year ago.

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The most common U.S. gas price encountered by motorists stood at $3.49 per gallon, up 10 cents from last week, followed by $3.29, $3.39, $3.59, and $3.19 rounding out the top five most common prices.

The median U.S. gas price is $3.45 per gallon, unchanged from last week and about 13 cents lower than the national average.

The top 10% of stations in the country average $5.02 per gallon, while the bottom 10% average $2.98 per gallon.

The states with the lowest average prices: Mississippi ($3.03), Oklahoma ($3.05), Arkansas ($3.10).

The states with the highest average prices: California ($5.23), Hawaii ($4.75), and Washington ($4.61).

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