Gas Prices Give Drivers a Reprieve Heading Into Memorial Day Weekend

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If you’re road-tripping this Memorial Day weekend, you have recession worries to thank for your cheaper tank of gas.

The average price of unleaded gasoline in the U.S. was $3.57 a gallon on Thursday, down 22% from a year ago, according to OPIS, an energy-data and analytics provider.

Motorists likely won’t see big changes anytime soon given the weak demand for fuel and low cost of oil, said Edward Moya, senior market analyst at trading firm Oanda.

“This is going to be a summer where I don’t anticipate we are going to have significantly higher prices like we typically do,” Moya said.

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Those traveling by car this holiday weekend will pay less for gasoline compared with last year. Fuel costs soared in 2022 after Russia’s invasion of Ukraine jolted energy markets. The average price of gasoline peaked at $5.02 in June, according to OPIS, which is owned by Dow Jones.

The shock to the energy markets was short-lived, however. The U.S. and Europe turned away from Russian oil, but Russia was able to sell more to India and China, alleviating pressure on the global energy market, analysts said.

While gas prices are down sharply from last year, they are still above where they were before the pandemic. The average price of gasoline was $2.84 a gallon at this time in May 2019, according to OPIS.

Gasoline prices in the U.S.—typically correlated with the price of oil—haven’t budged much this year due to a pessimistic economic outlook, analysts said. Recessionary fears around the globe have also held back demand for oil in other parts of the world, they said.

In the U.S, gross domestic product rose at an inflation- and seasonally-adjusted 1.1% annual rate from January to March, according to the Commerce Department. A recent poll of economists found that 61% of them expect a recession within the next 12 months.

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That cutback in spending is already showing up at the pump. Gasoline stations reported a 6.9% decline in sales through the first four months of 2023 compared with the previous year, according to figures from the U.S. Census Bureau.

The average price of gasoline hit a high of $3.69 this year in April. The small bump came after a group of large oil producers led by Saudi Arabia said they would cut oil production in May, leading to a temporary jump in crude prices.

Summer could still shake things up for gas prices, especially if storms knock out oil production in the Gulf of Mexico, said Andrew Gross, a spokesman for AAA.

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